October 12, 2009
Dear Friends of Our Firm,
There are currently about 57,000 Wisconsin residents working in Minnesota who will not be able to take advantage of a reciprocity agreement that currently exists between the two states effective in 2011. This agreement currently allows for residents of each state to file returns in their own states of residence. But on September 18th, Gov. Pawlenty of MN announced that his state would withdraw from the program at the end of the year.
WI sends MN money at the end of each tax year because more people live here who work in MN than live in that state and work in WI. But WI has been paying MN the taxes 17 months after taxes are collected, and even though WI pays interest on the taxes, MN claims the change will generate $131 million for that state over two years because it will receive payments more quickly and directly from taxpayers than from the WI Department of Revenue.
Wisconsin paid Minnesota $75.9 million for the 2007 tax year. Wisconsin is expected to pay the 2008 taxes in the near future.
