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Ed Johnson
Ed Johnson, Tax Preparer
Category: Tax
Satisfied Customers: 10760
Experience:  GPHR Cert; U.S. Treasury Tax Advocacy Panel appointee
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If I live in Minnesota, I work in South Dakota, do I have ...

Customer Question

If I live in Minnesota, I work in South Dakota, do I have to pay South Dakota state tax or Minnesota state tax?
Submitted: 10 years ago.
Category: Tax
Expert:  Ed Johnson replied 10 years ago.


Unfortunately, South Dakota and Minnesota do not have a recipricol state tax agreement.

This means you will have to file taxes in both states, but you will not be double taxed.

Income taxes for Minnesota should have already been withheld, so you will want to file in Minnesota first as a non-resident. Minnesota will be entitled to taxes on all income from Minnesotat sources.

South Dakota will want to tax your world wide income as a resident. However, SD will give you credit for taxes paid to Minnesota, so that you are not doulbe taxed. They will however collect the difference if the tax in SD would be higher than the tax in Mn.