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Many sampling strategies commonly used in molecular dynamics, such as umbrella sampling and alchemical free energy methods, involve sampling from multiple states. The Multistate Bennett Acceptance Ratio (MBAR) formalism is a widely used way of recombining the resulting data. However, the error of the MBAR estimator is not well-understood: previous error analyses of MBAR assumed independent samples. In this work, we derive a central limit theorem for MBAR estimates in the presence of correlated data, further justifying the use of MBAR in practical applications. Moreover, our central limit theorem yields an estimate of the error that can be decomposed into contributions from the individual Markov chains used to sample the states. This gives additional insight into how sampling in each state affects the overall error. We demonstrate our error estimator on an umbrella sampling calculation of the free energy of isomerization of the alanine dipeptide and an alchemical calculation of the hydration free energy of methane. Our numerical results demonstrate that the time required for the Markov chain to decorrelate in individual states can contribute considerably to the total MBAR error, highlighting the importance of accurately addressing the effect of sample correlation.