2005 Minnesota Statutes - 268.145 — Income tax withholding.

     268.145 Income tax withholding. 


    Subdivision 1.    Notification.  (a) Upon filing an 
 application for unemployment benefits, the applicant shall 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 shall deduct ten percent for federal 
 income tax, rounded down to the next lower whole dollar.  If an 
 applicant also elects to have Minnesota state income tax 
 withheld, the commissioner shall make an additional five percent 
 deduction for state income tax, rounded down to the next lower 
 whole dollar.  Any amounts deducted or offset pursuant to 
 sections 268.155, 268.18, and 268.184 have 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 shall not be 
 retroactive and shall only apply to unemployment benefits paid 
 after the election. 


    Subd. 2.    Transfer of funds.  The amount of any 
 unemployment benefits deducted under this section shall remain 
 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 shall not be corrected retroactively. 


    Subd. 4.    Federal requirement.  The commissioner shall 
 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 shall be considered as unemployment benefits 
 paid to the applicant. 


    HIST: 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