Form Iccr - Reciprocity Exemption For Individual Construction Contractors - 2012 Page 2
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1
2Form ICCR Instructions
Note: Law Change for Individual
form by Feb. 28 of each calendar year you
The Law
work for the construction contractor and
Construction Contractors
Construction contractors are required to
qualify for this reciprocity exemption. If you
After June 30, 2012, businesses are no
deduct and withhold 2 percent Min-
do not complete this form and give it to the
longer required to withhold 2 percent from
nesota income tax from payments made
construction contractor, they are required to
payments made to individual construction
to individual construction contractors
withhold 2 percent of Minnesota income tax
contractors. For details, see “Law Change
for work performed in Minnesota. Pay-
from payments made to you.
for Individual Construction Contractors”
ments are subject to 2 percent withhold-
under the What’s New tab in Withholding
Fill Out the Form Completely
ing if the work was performed in Min-
Tax on our website at
nesota and the total payments during
If you do not complete every item on this
mn.us.
the year exceed $600. [M.S. 290.92, subd.
form, the construction contractor (payer) is
4a(3) and 31]
required to withhold 2 percent Minnesota
Individual Construction
income tax from your pay.
Definitions
Contractors (Payees)
A construction contractor (payer) is
Penalties
any individual or business entity car-
If you knowingly make any statements on
Qualifying Information Regarding
rying on a trade or business described
this form you know are incorrect, you may be
Residency
in industry code numbers 23 through
assessed a $500 penalty.
Minnesota has income tax reciprocity
238990 of the North American Industry
agreements with Michigan and North
Classification System (NAICS). For a
Use of Information
Dakota. If you are a resident of one of these
description of the industry codes, go to
All information on Form ICCR is private by
states and you return to your state of resi-
state law. It may only be given to your state
dence at least once a month:
of residence, the Internal Revenue Service
Examples of construction trades covered
• income from personal services is exempt
and to other state tax agencies as provided
by this law include, but are not limited
from Minnesota income tax; and
by law. The information may be compared
to, residential and commercial building
with other information you furnished to the
• payments for personal services you
construction, residential remodeling,
Department of Revenue. Your name, address
receive as an individual construction
framing and finish carpentry, masonry,
and Social Security number are required for
contractor are not subject to the 2 percent
roofing and siding, electrical contract-
identification. Your address is also required
Minnesota withholding.
ing, plumbing and HVAC, drywall,
to verify your state of residence. The con-
painting and flooring.
Note: The income tax reciprocity agreement
struction contractor’s name, Minnesota tax
between Minnesota and Wisconsin ended
An individual construction contractor
ID number, address and phone number are
Dec. 31, 2009.
(payee) is any individual carrying on a
required in case we have to contact them re-
trade or business as a sole proprietorship
garding the tax withheld from your pay. The
Qualifying Information Regarding
described in industry code numbers 23
only information not required is your phone
Personal Service Income and
through 238990 of the NAICS. A single
number. However, we ask that you provide
Business Income
member Limited Liability Company
it so we can contact you quickly if we have
Personal service income (payments for
(LLC) is not a sole proprietorship for
questions.
professional services personally provided by
purposes of this law.
you) qualifies for the reciprocity exemption.
Construction Contractors
The term “carrying on a trade or busi-
Business income generated by your
ness” generally includes any activity
(Payers)
employees or resulting from the sale of
conducted for the production of income
goods does not qualify for reciprocity if
from selling goods or performing ser-
If you are making payment to an individual
that income is more than incidental. The
vices. Carrying on a trade or business
construction contractor (payee) who is a
services performed by employees or sales
includes all business activities (primary,
resident of a reciprocity state and they have
of goods are incidental if they are a minor
secondary, etc.).
not given you a properly completed Form
contribution to the income of the business.
ICCR, you must withhold 2 percent income
The salary you pay all employees, together
tax from their pay for work performed in
Information and Assistance
with the gross profit from the sales of goods,
Minnesota.
is presumed incidental if it is less than the
Additional forms and information, includ-
In addition, individual construction contrac-
greater of either $20,000 or 10 percent of the
ing fact sheets and frequently asked ques-
tors (payees) are required to give you a new
gross profit of the business.
tions, are available on our website.
Form ICCR each calendar year by Feb. 28.
If You Qualify for the Reciprocity
Website: mn.us
Send the completed form within 30 days of
Exemption and Do Not Want
receipt to Minnesota Revenue, Mail Station
Email:
withholding.tax@state.mn.us
Minnesota Income Tax Withheld
6501, St. Paul, MN 55146-6501. You must
Phone: 651-282 9999 or 1-800-657-3594.
From Your Pay
keep a copy of all Forms ICCR for five years
(
Call 711 for Minnesota Relay)
TTY:
from the date received. You may be assessed a
To avoid having Minnesota income tax
We’ll provide information in other formats
$50 penalty for each form you are required to
withheld from your pay, you must complete
upon request to persons with disabilities.
send us but do not.
Form ICCR and give it to the construc-
tion contractor (payer) before they make
payment to you. You must provide a new
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