There's good news for area residents who live in Minnesota but work in Wisconsin according to State Representative Greg Davids of Preston and State Senator Jeremy Miller of Winona.
Last session, the Legislature approved a provision that ensures these Minnesotans would not pay additional income taxes in the absence of a reciprocity agreement with Wisconsin, instead offering refundable income tax credits to those residents for taxes paid. Recently the Minnesota Department of Revenue notified its counterpart in Wisconsin that based on this new law, a reciprocity agreement would not be in the best interest of Minnesotans.
In a letter to Wisconsin's revenue department, Minnesota's revenue commissioner noted that the refundable reciprocity credit that was enacted in the 2017 will prevent approximately 20,000 Minnesotans from paying more tax than they would have if a reciprocity agreement were in place. A reciprocity agreement would also force Minnesota to collect more than $105 million annually from Wisconsin as more Wisconsin residents work in Minnesota than Minnesotans who work in Wisconsin.
The lawmakers also noted that Minnesotans who work in Wisconsin will also continue to file in both states as they have since 2009.