Subdivision 1. Notification. (a) Upon filing an application for unemployment benefits, the applicant must be informed that:
(1) unemployment benefits are subject to federal and state income tax;
(2) there are requirements for filing estimated tax payments;
(3) the applicant may elect to have federal income tax withheld from unemployment benefits;
(4) if the applicant elects to have federal income tax withheld, the applicant may, in addition, elect to have Minnesota state income tax withheld; and
(5) at any time during the benefit year the applicant may change a prior election.
(b) If an applicant elects to have federal income tax withheld, the commissioner must deduct ten percent for federal income tax. If an applicant also elects to have Minnesota state income tax withheld, the commissioner must make an additional five percent deduction for state income tax. Any amount deducted under section 268.085 has priority over any amounts deducted under this section. Federal income tax withholding has priority over state income tax withholding.
(c) An election to have income tax withheld may not be retroactive and only applies to unemployment benefits paid after the election.
Subd. 2. Transfer of funds. The amount of any unemployment benefits deducted under this section remains in the trust fund until transferred to the federal Internal Revenue Service, or the Department of Revenue, as an income tax payment on behalf of the applicant.
Subd. 3. Correction of errors. Any error that resulted in underwithholding or overwithholding under this section will not be corrected retroactively.
Subd. 4. Federal requirement. The commissioner must follow all federal requirements for the deduction and withholding of income tax from unemployment benefits.
Subd. 5. Effect of payments. Any amount deducted under this section is considered as unemployment benefits paid to the applicant.
1996 c 417 s 17; 1997 c 66 s 79; 1998 c 254 art 1 s 73; 1999 c 107 s 53,66; 2000 c 343 s 4; 1Sp2001 c 4 art 2 s 23; 1Sp2003 c 3 art 2 s 20; 2004 c 183 s 77; 2005 c 112 art 2 s 35; 2007 c 128 art 6 s 84-86; 2008 c 300 s 51; 2009 c 78 art 4 s 42,50; 1Sp2019 c 7 art 8 s 5
Structure Minnesota Statutes
Chapters 268 - 269 — Employment And Economic Development
Chapter 268 — Unemployment Insurance
Section 268.001 — Citation; Minnesota Unemployment Insurance Law.
Section 268.03 — Public Purpose Of The Minnesota Unemployment Insurance Program.
Section 268.031 — Standard Of Proof; Statutory Interpretation And Application.
Section 268.032 — Electronic Transmission; When Allowed; Sending To Last Known Address Required.
Section 268.033 — Computation Of Time.
Section 268.034 — Computations Of Money Rounded Down.
Section 268.035 — Definitions.
Section 268.042 — Employers Coverage.
Section 268.0425 — Electronic Transaction Presumption.
Section 268.043 — Determinations Of Coverage.
Section 268.044 — Wage Reporting.
Section 268.045 — Employer Tax Or Reimbursable Accounts.
Section 268.047 — Effect On Employer Of Unemployment Benefits Paid.
Section 268.051 — Employers Taxes.
Section 268.052 — Payment To Trust Fund By State And Political Subdivisions.
Section 268.0525 — Indian Tribes.
Section 268.053 — Payment To Trust Fund By Nonprofit Organizations.
Section 268.057 — Collection Of Taxes.
Section 268.058 — Lien, Levy, Setoff, And Civil Action.
Section 268.059 — Garnishment For Delinquent Taxes And Unemployment Benefit Overpayments.
Section 268.0625 — Revocations Of Business Licenses.
Section 268.063 — Personal Liability.
Section 268.064 — Liability For Debts Upon Acquisition.
Section 268.065 — Liability Of Amounts Due From Subcontractors And Employee Leasing Firms.
Section 268.066 — Cancellation Of Amounts Due From An Employer.
Section 268.0675 — No Election Of Remedy.
Section 268.068 — Notice To Workers.
Section 268.069 — Payment Of Unemployment Benefits.
Section 268.07 — Benefit Account.
Section 268.084 — Password; Presumption.
Section 268.085 — Eligibility Requirements; Payments That Affect Benefits.
Section 268.0865 — Continued Request For Unemployment Benefits.
Section 268.087 — Unemployment Benefits Due Deceased Persons.
Section 268.088 — Benefits Paid During Certain Voluntary Unemployment.
Section 268.095 — Ineligibility Because Of Quit Or Discharge.
Section 268.101 — Determinations On Issues Of Ineligibility.
Section 268.103 — Appeals By Electronic Transmission.
Section 268.115 — Extended Unemployment Benefits.
Section 268.125 — Additional Unemployment Benefits.
Section 268.131 — Combined Wage Arrangements For Work In Multiple States.
Section 268.133 — Unemployment Benefits While In Entrepreneurial Training.
Section 268.136 — Shared Work.
Section 268.145 — Income Tax Withholding.
Section 268.155 — Child Support Deducted From Unemployment Benefits.
Section 268.18 — Unemployment Benefit Overpayments.
Section 268.182 — Fraud; Criminal Penalty.
Section 268.183 — Applicant Administrative Penalties.
Section 268.184 — Employer Misrepresentation And Misreporting; Administrative Penalties.
Section 268.186 — Records; Audits.
Section 268.188 — Subpoenas; Oaths.
Section 268.19 — Data Privacy.
Section 268.192 — Protection Of Rights.
Section 268.194 — Unemployment Insurance Trust Fund.
Section 268.196 — Administration Account.
Section 268.199 — Contingent Account.
Section 268.20 — Representation In Court.
Section 268.21 — Nonliability Of State.
Section 268.211 — Unemployment Insurance Benefits Telephone System.
Section 268.215 — Day Of The Week And Date Requirement.