MN Issues Guidance on Withholding on Construction Contractors 

The Minnesota Department of Revenue has created a Web page to address frequently asked questions relating to a new personal income tax withholding law impacting construction contractors. The new law, which takes effect January 1, 2009, requires construction contractors who make payments to an individual construction contractor carrying on a trade or business as a sole proprietorship to deduct and withhold 2% of the payment(s) as Minnesota income tax withholding. These payments will be subject to 2% withholding only if the work was performed in the state of Minnesota and the total payments during the year exceed $600. (2% Minnesota Income Tax Withholding on Construction Contractors FAQ's, Minnesota Department of Revenue, September 19, 2008.)

Reprinted with permission. © CCH

MN Issues Guidance on Withholding on Construction Contractors  The Minnesota Department of Revenue has created a Web page to address frequently asked questions relating to a new personal income tax withholding law impacting construction contractors. The new law, which takes