Updated October 16, 2026. Quick answer: Yes, unless you opt out. The Department of Revenue says “Minnesota requires withholding on annuity and pension payments”, unless the recipient opts out, and the default rate is 6.25%.
Minnesota pension withholding at a glance
| Item | What the documents say |
|---|---|
| Is state withholding required on regular pension payments? | Yes, unless you opt out on Form W-4MNP |
| Default rate if you give the payer no form | 6.25% of the taxable payment if you do not opt out or give a rate or amount and the payer has been unable to obtain a Form W-4MNP from you; a payer that already holds an earlier Form W-4MNP or election generally keeps following it until it asks for an update |
| Lump sum or one-time payment | For a taxable nonperiodic distribution you complete Form W-4MNP to set the percentage or amount or elect none; the default is also 6.25% |
| Form to start, change or stop it | Form W-4MNP (2026 edition), given to the payer |
| Changed for 2026? | The 2026 form carries 2026 tax rates; the option to choose any rate or amount dates from legislation enacted May 24, 2023 |
What the Minnesota documents say
Minnesota’s Department of Revenue says that if the recipient does not opt out or give a rate or amount, “your payer must withhold at the default rate of 6.25%”.
On Form W-4MNP the recipient can choose the default 6.25%, no withholding, another percentage, or a set dollar amount, separately for periodic and nonperiodic payments. The Department says the recipient can “set your withholding to any rate or amount, including none”.
For a taxable nonperiodic payment the Department says that “you must complete Form W-4MNP to set the withholding amount or percentage”.
What the printed rate means in dollars
For a pension of $2,000 a month with no Form W-4MNP choice: 6.25% of $2,000 is $125 (computed as $2,000 times 6.25%).
These are illustrations of the rate the state document prints, not a prediction of how your payer will calculate or what you will owe at filing.
What a mover should know
This page is about Minnesota as a state of residence. An instruction line written for a nonresident or part-year filer is not the rule for a resident, and none of the documents read settles a part-year or two-state case, so check each state’s own rule. The federal side is the same everywhere; CMG’s federal 20% withholding on a pension lump sum page covers it, state tax withholding on IRA and 401(k) withdrawals in Minnesota covers the account side, and state withholding on retirement withdrawals lists the other states checked.
What the documents do not say
- The documents read describe the change allowing any rate or amount as 2023 legislation, and describe no pension-specific change for 2026.
Common mistakes
- Giving the payer a federal W-4P and assuming it also settles the state; check whether the state’s own form is needed.
- Assuming the answer for one state applies to another, or that state withholding settles the state tax owed at filing.
Related: state tax withholding on IRA and 401(k) withdrawals in Minnesota, Minnesota retirement taxes, whether Minnesota taxes pensions, state withholding on retirement withdrawals, and retirement withholding calculator.
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Answer againSources
- Withholding for Annuities and Pensions: https://www.revenue.state.mn.us/mndor-pp/1456?type=html
- 2026 W-4MNP, Minnesota Withholding Certificate for Retirement Account, Pension, or Commercial Annuity Payments: https://www.revenue.state.mn.us/sites/default/files/2025-12/w-4mnp.pdf
- IRS Tax Topic 413, Rollovers from retirement plans: https://www.irs.gov/taxtopics/tc413
Sources: the primary documents linked above, read on October 16, 2026. General information, not tax advice. Your own facts decide the outcome, and a tax professional or the state agency itself is the right place to confirm anything consequential.