As an S Corporation owner in Minnesota, it’s required and crucial that you understand how to comply with the new Minnesota Paid Leave requirements, which will be applicable to your W2 owner wages, beginning on January 1, 2026. Quarterly wage detail reporting and the collection of premiums will take place using the existing Minnesota Unemployment Insurance (UI) system but, since you’ve previously been exempt from UI tax as an owner, you’ll need to set up a special Minnesota Paid Leave Only account. This Paid-Leave-Only account will allow you to report quarterly wages and remit required premiums through the UI system without being liable for UI taxes.

It is important to note that, if you have already elected voluntary coverage under MN Unemployment Insurance, setting up a separate Paid-Leave-Only account is not required, as the reporting and premiums will coincide with existing UI account filings.

Below are the steps you should take to establish and manage your Minnesota Paid Leave obligations effectively.

Step 1: Establish a Paid Leave-Only Account

1. Gather the following information to register for the new account
   • Federal and State ID numbers
   • Business organization information (type of business, state and date of incorporation)
   • Payroll information (date wages were first paid in MN and number of employees you are paying
     paid leave covered wages to in Minnesota – likely only your reported W2 wages)
   • Owner/Officer information (names, address, phone number, SSN or EIN, percent of ownership)
2. Navigate to the MN UI Webpage
   • Scroll down to the “New employer account” section and select “Register”.
     Tip: You will see a link to a video on how to register that may be helpful to view.
3. Follow the on-screen instructions to complete the account registration process:
   • Review the information for accuracy before submitting.
   • After submission, you will receive a confirmation email with your account details. Save these details for future access and reference

Step 2: Assign a Paid Leave Administrator

This new account created in step one is where you will designate one or more Paid Leave Administrators, the main point of contact for Paid Leave within your organization. If you are the only paid employee, this will likely be you. More information on assigning a Paid Leave Administrator is available here.

Step 3: Create a Paid Leave Administrator Account

1. Visit the Paid Leave website to create your administration account after the designation has been made in STEP 2.
2. Set Up Administrator Permissions
   • Follow the prompts to assign the appropriate permissions and responsibilities to the administrator account.
   • Ensure the administrator is set up to manage all reporting and communication tasks related to Paid Leave.
   • Once the account is created, verify the account setup by logging in and checking access to the necessary tools and resources.

Beginning January 1, 2026, you will be required to withhold and submit premium payments through the MN UI/Paid Leave system. Information on the premium rates, reporting, and other employer responsibilities is available in the Employer Resource Toolkit.

This resource is designed to outline the process of establishing a Paid Leave Only account and appointing a Paid Leave Administrator. As an S Corp owner in Minnesota paying wages to one or more owners, it is important to stay informed and up-to-date with any wage reporting and payment rules, program changes, or additional requirements that may arise.