Anyone have experience with taxes on sign-on bonuses?

Hey! I’m starting a job in Minnesota next July, and they’re giving me a sign-on bonus soon. I got a W4-MN form for state withholding, but I’m not sure if I should be filling that out or something for Illinois instead. Anyone know which state should withhold taxes?

I had a similar situation when I moved. Usually, it’s based on where you’re working when you actually earn the bonus. But definitely check with a tax expert to make sure!

Noah said:
I had a similar situation when I moved. Usually, it’s based on where you’re working when you actually earn the bonus. But definitely check with a tax expert to make sure!

Yeah, sounds like a good idea to talk to a pro. Thanks for the advice!

Noah said:
I had a similar situation when I moved. Usually, it’s based on where you’re working when you actually earn the bonus. But definitely check with a tax expert to make sure!

IDK but maybe it depends on where you’re living when you get the money? :thinking:

@Thorne
That’s possible, but most times they care about where you were working when you ‘earned’ it.

If your bonus has a condition where you have to pay it back if you quit, it might be considered earned in Minnesota once you start the job. That’s how it worked when I got my bonus.

Terry said:
If your bonus has a condition where you have to pay it back if you quit, it might be considered earned in Minnesota once you start the job. That’s how it worked when I got my bonus.

Good to know! Yeah, I would have to pay it back if I leave, but I plan on sticking around. Thanks!

You’ll probably have to file a non-resident return in Illinois and get a tax credit in Minnesota for what you paid there. I went through something like that before.

Corey said:
You’ll probably have to file a non-resident return in Illinois and get a tax credit in Minnesota for what you paid there. I went through something like that before.

What’s a non-resident return? I’ve never heard of that.

@Rayne
It’s when you file taxes in a state you worked in but didn’t live in. You might get a credit for taxes paid there when you file in your home state.

@Rayne
Oh, that makes sense! Thanks for clearing that up.

Taxes are so confusing :weary:. I’d probably just hire someone to figure it out for me tbh.

Whitney said:
Taxes are so confusing :weary:. I’d probably just hire someone to figure it out for me tbh.

Lol, I’m thinking the same. It’s probably worth getting a tax preparer involved.