M1CR: Credit for Income Tax Paid to Another State (2025)
Minnesota · Minnesota DOR · Used for tax years 2025
2025 Minnesota Schedule M1CR calculates the credit for income tax paid to another state on income also taxed by Minnesota. It reports the shared taxable income, the other state's tax, and the credit amount to include on Schedule M1C. Include this schedule with Form M1.
Who files this form
Use Schedule M1CR to claim a credit for income tax paid to another state on income also taxed by Minnesota. Generally, all of these must apply:
- You were domiciled in Minnesota for all or part of 2025.
- You paid 2025 income tax to Minnesota and another state on the same income.
- You were a Minnesota resident when you received the income taxed by the other state.
- You filed an income tax return with the other state. This may include an entity paying taxes on your behalf.
For this credit, the District of Columbia and Canadian provinces and territories are considered states. For tax paid to Wisconsin, use Schedule M1RCR instead.
183-day rule exception: You may qualify if you were a permanent resident of another state, must file as a Minnesota resident under the 183-day rule, and paid 2025 income tax to both states on the same income. You must include a statement from the other state's tax department confirming that you cannot claim a credit there for income tax paid to Minnesota.
What you'll need
Have these forms and records available, as applicable:
- Form M1 and Schedule M1C: These supply figures used to calculate your Minnesota tax after credits.
- The other state's income tax return: You need the tax amount before withholding and estimated tax payments are subtracted. Part-year residents also need the income taxed by that state before itemized or standard deductions.
- Schedule M1M: Full-year residents use it for the line 2 worksheet.
- Schedule M1NR: Part-year residents use it to calculate line 2.
- Federal Form 1116 for Canadian taxes: Use it to complete the line 6 worksheet if you paid tax to a Canadian province or territory.
- Entity-level return: If an entity paid tax on your behalf, include its return showing the other state's tax liability. If you were not required to file an individual return there, show your share of the income and taxes paid by the entity.
- Other state's tax department statement: Required if you claim the 183-day rule exception.
How to file
Complete a separate Schedule M1CR for each state or province to which you paid qualifying taxes. Use Schedule M1RCR for Wisconsin.
- Full-year residents enter the smaller of lines 5 and 6 on line 7.
- Part-year residents complete lines 8 through 11 and enter the smaller of lines 5 and 10 on line 11.
- Include the credit on line 3 of Schedule M1C. If you have multiple schedules, add the applicable credit amounts from each Schedule M1CR and Schedule M1RCR.
Include Schedule M1CR with your Form M1. Include any required entity-level return or statement for the 183-day rule exception.
Common mistakes
- Using M1CR for Wisconsin tax: Use Schedule M1RCR instead.
- Claiming excluded taxes: Do not include taxes paid to a local government or a national government, including Canada or a U.S. possession. Do not include Canadian provincial or territorial tax used to claim a federal foreign tax credit; follow the line 6 worksheet.
- Using the wrong tax amount on line 6: Enter tax before subtracting withholding or estimated payments.
- Including excluded lump-sum distributions: Do not include qualified retirement plan lump-sum distribution income reported on Schedule M1LS on line 1, or the related tax on line 6.
- Continuing when line 4 is zero or less: Stop. You do not qualify for this credit.
- Missing rounding rules: Round dollar amounts to the nearest whole dollar. Carry the decimals on lines 3 and 9 to five places, and enter 1.00000 if the numerator exceeds the denominator.
- Missing entity-tax checkboxes: Check the appropriate non-composite or composite tax box if a pass-through entity paid the tax on your behalf.
Questions people ask
What if I paid income tax to more than one other state?
Complete a separate Schedule M1CR for each state, using Schedule M1RCR for Wisconsin. Add the applicable credit amounts and enter the total on line 3 of Schedule M1C.
Can I claim this credit for Michigan or North Dakota withholding on wages?
Do not use Schedule M1CR if you received personal service income from working in Michigan or North Dakota and had 2025 income tax withheld by that state. File a return with that state to get a refund of tax withheld while you were a Minnesota resident. Tax paid on other income, such as rental income, may qualify for this credit.
Can taxes paid by a partnership or S corporation count?
Include income taxes paid to another state by an S corporation or partnership that you included on line 2 of Schedule M1MB. Check the appropriate entity-tax box and include the required entity-level return.
Is there a penalty for fraudulently claiming the credit?
Yes. A fraudulent credit that results in a refund carries a penalty of 50% of the refund attributable to fraud. If a fraudulent credit reduced your tax liability, a penalty of 50% of the unpaid tax also applies.