MN + WI Tax Reciprocity Might Make A Return
Good news for those who live in Wisconsin and work in Minnesota: the tax reciprocity that disappeared about ten years ago might be making a return! Without it, residents have been forced to file income tax returns for both states often (usually) costing them more in the process - both in fees and actual taxes.
As the Superior Days delegation canvasses Madison this week, the optimistic news started to make it's way back - first in a social media post from Superior Mayor Jim Paine and then a little later in news reports. The long-standing reciprocity was ended when then-Minnesota Governor Tim Pawlenty closed out the 40 year agreement over a disagreement. Since that time, cross-state workers have been forced into the unfortunate tax situation.
It's important to note that even though there have been good signs towards a deal - the legislation needed to renew the reciprocity hasn't been advanced yet. But, legislative insiders from both states have suggested that the time is right for it to happen. Wisconsin Revenue Secretary Peter Barca suggested that Minnesota's newly-elected Governor might play a key role:
The benefit for us is Minnesota Governor Tim Walz represented a border community so I think he will be even more acutely aware of how frustrating it is to have to fill out two sets of taxes. Even though I came from more the Illinois border down in the Racine area, I get enough anxiety filling out one tax form. I can't imagine having to fill out two.
Tax boards from both Minnesota and Wisconsin have been working on a compromise deal with a target to have it in place by the time individuals fill out their 2019 taxes.