Personal Returns in Brookings
A Brookings household files a federal return and no state income tax return, because South Dakota does not tax personal income. The people we prepare returns for here are a varied group: university professors and graduate students, engineers and line workers at the city's manufacturers, nurses and clinic staff, families who farm in Brookings County, and people who live in Minnesota and drive to work in the city, or the reverse. Each brings different questions, and some still owe a return to another state. BOMCAS prepares personal returns for Brookings residents remotely, from a simple W-2 return to returns with rentals, a farm or a business.
Statewide residency and federal filing basics are on our South Dakota personal tax page. Here, the focus is students, university staff, plant workers and Minnesota commuters.
University Faculty and Staff
South Dakota State University employs close to 4,000 people. Faculty and staff often have retirement contributions to the South Dakota Retirement System or an optional plan, and some contribute to a 403(b) or 457 plan as well. Researchers may receive summer salary, consulting fees or honoraria that arrive on a 1099 rather than a W-2, which means self-employment tax and possibly estimated payments. Faculty who moved to Brookings from a state with an income tax need a final part-year return there, and some states continue to tax income such as deferred compensation or bonuses earned before the move.
Graduate Students and Students Who Work
Graduate assistants usually receive a stipend and a tuition waiver. A tuition reduction for a graduate student who teaches or does research is usually excluded from income as a qualified tuition reduction, but the stipend itself is taxable, and so is any scholarship money used for room and board. Undergraduates who work part time in Brookings restaurants, stores or on campus may still be claimed as dependants by their parents, which affects who can claim the American opportunity credit. International graduate students on F-1 or J-1 visas generally file as nonresidents and attach Form 8843, and their home country's tax treaty may exempt part of their stipend.
Employees of Brookings Manufacturers
Workers at Daktronics, Solventum, Larson and other plants may hold shares through an employee stock purchase plan or receive restricted stock units. Selling those shares needs the correct cost basis, which brokerage statements often understate, causing the same income to be taxed twice. Overtime is common in manufacturing, and the federal deduction for qualified overtime pay for 2025 through 2028 can lower the tax for eligible hourly workers.
Crossing the Minnesota Line
Minnesota residents who work in Brookings
A worker who lives in Lincoln or Pipestone County, Minnesota, and works in Brookings owes Minnesota income tax on those wages, because Minnesota taxes its residents on all their income. South Dakota employers do not have to withhold Minnesota tax, so these employees often need to make estimated payments or ask the employer to withhold voluntarily.
Brookings residents who work in Minnesota
A Brookings resident who works in Minnesota owes Minnesota nonresident income tax on the Minnesota wages once their Minnesota income reaches the filing threshold. Minnesota has no reciprocity agreement with South Dakota, so the tax is not refunded or shifted. Construction workers and technicians who spend part of the year on Minnesota jobs need to keep track of their days and wages there.
Farm Families
Farm households report on Schedule F, with crop insurance, government payments, commodity sales deferred to the next year and depreciation on machinery and buildings. We also look at income averaging for farmers, which spreads a high-income year across the three previous years, and at the timing of sales of grain and livestock.
Landlords Near Campus
Brookings has a large rental market for students. Owners of houses and duplexes near campus report rental income and expenses, depreciate the property and keep records of repairs and improvements. Parents who buy a house for a student to live in, and rent rooms to roommates, have a mix of personal and rental use that needs careful handling.
What to Send Us
Upload your W-2s, 1099s, stock plan statements, tuition and scholarship forms, rental records and last year's return through our secure portal. We send one list of questions, prepare the federal return and any Minnesota or other state return, and review the results with you before filing electronically.
Brookings Personal Tax Preparation Questions
Do SDSU employees pay state income tax?
Not to South Dakota, which has no income tax. A new employee who moved from another state may owe that state a part-year return, and income earned in Minnesota or elsewhere can be taxed there.
Is my graduate assistantship taxable?
The stipend is taxable wages or scholarship income. A tuition waiver for teaching or research assistants is often excluded as a qualified tuition reduction, but parts of a scholarship used for housing or meals are taxable.
I live in Minnesota and work in Brookings. What do I file?
A Minnesota resident return that includes your Brookings wages, plus your federal return. South Dakota employers do not have to withhold Minnesota tax, so you may need estimated payments or voluntary withholding.
Why does my stock plan sale look like a big gain?
Brokerage forms often report the cost basis of ESPP or RSU shares without the income already included on your W-2. We adjust the basis so the income is not taxed twice.
Talk to BOMCAS About Personal Tax Preparation in Brookings
If your household also has a company or farm operation, coordinate this return with business filings and current financial records. Families employing household staff can use payroll support. Moves, stock compensation and retirement contributions belong in tax planning; missed years are handled through late-filing help. Students and researchers from Canada should read our cross-border page, and rental or side-business sellers should check sales tax. Statewide context for other services is available in our South Dakota guides to business tax returns, sales and use tax, bookkeeping, payroll, tax planning, late filing and cross-border tax, plus the South Dakota overview.
Share a few details about your Brookings situation, and BOMCAS will reply with practical next steps and the information needed for a quote. Use the contact page or the form below, call 780-667-5250 or email info@bomcas.ca. To compare services, return to the Brookings overview. This information is general and does not replace advice for your specific facts.