12 September 2019 Minnesota revised 2019 withholding tables released The Minnesota Department of Revenue released revised 2019 withholding wage-bracket tables and the computer formula that reflect legislation enacted earlier this year (HF 5). Under the law, the second-tier income tax rate bracket is reduced from 7.05% to 6.8% and the income tax brackets for all tiers are adjusted. According to a Department withholding tax representative, employers should begin using the updated tables as soon as possible, but there is no need to retroactively apply the revisions to state income tax already withheld. (Minnesota Department of Revenue email listserv announcement, September 2019; telephone conversation, withholding tax representative, September 10, 2019.) The withholding tables and computer formula are updated to reflect changes to the standard deduction, exemptions, and rates. The Department's Withholding Tax Calculator is also revised to reflect the income tax table changes. The Department suggests that employees consider submitting a newForm W-4MN, Minnesota Employee Withholding Allowance/Exemption Certificate, to correctly determine their Minnesota withholding allowances in light of the legislative changes. The 2019 withholding tables and computer formula within the Minnesota withholding guide are updated. The Department plans to release 2020 forms, instructions, and tax tables by the end of January 2020. Per the Department representative, the supplemental rate of income tax withholding is unchanged at 6.25% (.0625). Supplemental payments made to an employee separately from regular wages are subject to the 6.25% Minnesota withholding regardless of the number of withholding allowances the employee claimed. Multiply the supplemental payment by 6.25% (.0625) to calculate the Minnesota withholding. If you make supplemental payments to an employee at the same time you pay regular wages and you list the two payments separately on the employee's payroll records (regardless of whether you list the amounts separately on the paycheck), choose one of the following methods to determine how much to withhold: Method 1. Add the regular wages to the supplemental payment and use the tax tables to find how much to withhold from the total. Method 2. Use the tax tables to determine how much to withhold from the regular wages alone. Multiply the supplemental payment by 6.25% (.0625) to determine how much to withhold from that payment. If you do not list the regular wages and the supplemental payment separately on the employee's payroll records, you must use Method 1. The Department suggests that employees consider submitting a new Form W-4MN, Minnesota Employee Withholding Allowance/Exemption Certificate, to correctly determine their Minnesota withholding allowances after the legislative changes. It notes, however, that the requirements for submitting Forms W-4MN have not changed. As previously reported, Form W-4MN now allows individuals to calculate Minnesota withholding allowances separately from their federal Form W-4. Individuals can provide a completed Form W-4MN to their employer with their Minnesota allowances and any additional amount they want withheld per paycheck. (Minnesota Department of Revenue email listserv announcement, April 2019; EY Payroll Newsflashes Vol. 20, #003, 1-3-2019 and #065, 5-16-2019.) The bill contains federal income tax law conformity and nonconformity provisions. For example, Minnesota law now conforms to the federal definition of the standard deduction. Hence, for 2019, the standard deduction is $12,200 for individuals, $18,350 for heads of household and $24,400 for married filing joint and surviving spouses. However, there are also nonconformity provisions, such as the addition of a new state dependent exemption equaling $4,250 per dependent, effective for taxable years after December 31, 2018. See the Department's 2019 legislative summary for more information on the effect of the legislation on state income tax law. For more information on Minnesota state income tax withholding, see the Department's website.
Document ID: 2019-1612 | |||||||||
