Minnesota Tax Withholding Instructions
Appendix to Policy
The University of Minnesota is responsible for compliance with Minnesota State laws requiring withholding on specific types of compensation for services performed in Minnesota. The1099-Misc form reports both fees and expenses.
ENTERTAINER TAX 2%
Compensation that nonresident entertainment entities receive for performances in Minnesota is taxed at 2% on the gross compensation. Gross compensation includes (but is not limited to):
- all compensation paid for a performance
- reimbursed expenses
- prize winning at spectator event
Entertainment entities are:
- a nonresident entertainer who is paid for providing entertainment as an independent contractor
- a partnership that is paid provided by nonresident entertainers who are partners
- a corporation that is paid provided by nonresident entertainers who are stockholders of the corporation
Entertainers include, but are not limited to, musicians, singers, dancers, comedians, actors, athletes, thespians, public speakers, and visiting professors/instructors for noncredit courses.
Nonresident public speakers are subject to the entertainer tax. However, if the speaker's compensation is less than $2,000 per engagement or is merely a reimbursement of expenses, withholding is not required.
Individuals who are full-year residents of North Dakota and Michigan are exempt from the entertainer tax. However, they must have regular Minnesota income tax withheld unless they properly complete Form MW-R, reciprocity exemption/affidavit for residency.
MINNESOTA WITHHOLDING TAX
Self-employed individuals working in Minnesota who are not Minnesota residents are subject to Minnesota income tax withholding unless a properly completed W-4 form (claiming exempt) is on file in Disbursement Services before or coincident with the first payment request. Individuals who are full-year residents of North Dakota and Michigan are exempt if they properly complete Form MW-R, reciprocity exemption/affidavit of residency.
Individuals employed by another organization that is receiving payment are exempt from withholding.
Payment for reimbursement of out of pocket expenses is exempt from withholding.