Reciprocity for S Corporations

Minnesota has income tax reciprocity agreements with Michigan and North Dakota. These agreements may simplify tax filing for people who live or work in Minnesota and one of these states by letting them file a return only in their home state instead of both states.

However, the income earned by an S corporation does not qualify for exemption under the reciprocity agreements. If an S corporation does business in a reciprocity state and the sole shareholder is a Minnesota resident, the shareholder would be required to file returns in both states.

For more information, see our Reciprocity fact sheet.