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Minnesota Income Tax Guide 2026 | Rates, Brackets & Calculator

Daniel · CountryTaxCalc Updated June 2026
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KEY INSIGHT
At $100,000 gross income, a Minnesota single filer pays approximately $5,349 in state income tax — an effective rate of 5.35%. Minnesota's top rate of 9.85% is among the highest in the Midwest, applying to income above $193,240 for single filers.
At a glance

Key Facts

Income Tax Brackets (2026)
4 brackets: 5.35% on $0-$31,690; 6.80% on $31,690-$104,090; 7.85% on $104,090-$193,240; 9.85% above $193,240 (single filer thresholds)
At $100,000 Income (Single)
Taxable ~$80,625 (after std deduction + exemption); tax ~$5,023 (5.02% effective rate)
Standard Deduction
$14,575 (single) / $29,150 (MFJ) — Minnesota matches federal standard deduction amounts
Personal Exemption
$4,800 per taxpayer — phases out above $220,650 (single)
Social Security
Partially exempt — fully exempt if AGI below $75,000 (single) / $100,000 (MFJ); taxable above those thresholds
Estate Tax
13%-16% on estates above $3 million — low threshold vs federal ($13.6M)
Capital Gains
Taxed as ordinary income at up to 9.85% — no preferential rate at state level
Introduction

Minnesota has one of the most progressive income tax systems in the Midwest, with four brackets ranging from 5.35% to 9.85%. The 9.85% top rate — among the highest in the nation — applies to income above $193,240 for single filers. Minnesota also imposes an estate tax on estates above $3 million, with rates from 13% to 16%.

What distinguishes Minnesota from many high-tax states is its relatively generous personal exemption ($4,800 per person) and a meaningful partial exemption for Social Security income below $75,000 AGI. Minnesota consistently ranks among the top states for quality of life, healthcare, and public education.

Section 01

Minnesota Income Tax Brackets 2026

Minnesota uses a progressive four-bracket system. For single filers in 2026: 5.35% on the first $31,690; 6.80% from $31,690 to $104,090; 7.85% from $104,090 to $193,240; and 9.85% on income above $193,240. For married filing jointly, the same rates apply with wider brackets roughly doubled: 5.35% to $46,330; 6.80% to $184,040; 7.85% to $321,450; 9.85% above. Minnesota's 9.85% top rate makes it one of the most progressive income tax states in the Midwest. The brackets are adjusted annually for inflation.
Section 02

Minnesota Standard Deduction and Personal Exemption

Minnesota conforms to federal standard deduction amounts: $14,575 for single filers and $29,150 for married filing jointly in 2026. Additionally, Minnesota allows a personal exemption of $4,800 per person, reducing taxable income further. However, this exemption phases out for higher earners — beginning at $220,650 for single filers and reducing dollar-for-dollar above that threshold. The combination of standard deduction and personal exemption means a single filer earning $100,000 has a Minnesota taxable income of approximately $80,625 rather than the full $100,000.
Section 03

Social Security Tax in Minnesota

Minnesota is one of the few states that taxes Social Security benefits, though a partial exemption has been phased in since 2023. For 2026, Social Security income is exempt up to $75,000 adjusted gross income (single) or $100,000 (MFJ). Above those thresholds, Social Security benefits are gradually included in Minnesota taxable income, up to the federal taxable amount. This is an important consideration for retirees choosing between Minnesota and states that fully exempt Social Security income (such as Illinois, Pennsylvania, and New Jersey).
Section 04

Minnesota Estate Tax

Minnesota levies an estate tax on estates above $3 million — one of the lower thresholds in the US. The rates range from 13% to 16% on the taxable estate above the exemption. A $5 million estate would owe approximately $260,000–$320,000 in Minnesota estate tax. The federal estate tax exemption in 2026 is approximately $13.6 million, meaning many estates exempt from federal tax still owe Minnesota estate tax. Unlike the federal exemption, Minnesota's $3 million threshold is not portable between spouses without advance planning.
Section 05

Other Minnesota Taxes

Minnesota imposes a 6.875% state sales tax, with cities adding local taxes up to 2% (Twin Cities metro combined rate ~7.875%). Groceries and clothing are exempt from sales tax — a notable relief compared to neighboring states. Property taxes average approximately 1.12% effective rate statewide, though rates vary significantly by county. Minnesota has no capital gains tax separate from income tax — capital gains are taxed as ordinary income at the same brackets (up to 9.85% for long-term gains at higher incomes, unlike the federal preferential 15%/20% rate).
Section 06

Minnesota vs Neighboring States

Compared to Wisconsin (4 brackets, 3.54%–7.65% top), Iowa (recently reduced to 3.9% flat), and South Dakota (no income tax), Minnesota's tax burden is substantially higher. At $100,000 income, a Minnesota resident pays approximately $2,000–$3,400 more in state income tax than a Wisconsin resident and $5,000+ more than a South Dakota resident. The difference is partially offset by Minnesota's extensive public services, strong public schools, and high quality of life rankings — Minnesota consistently ranks among the top 10 states for healthcare, education, and infrastructure.
Section 07

Remote Workers and Minnesota Tax

Minnesota taxes income earned by Minnesota residents regardless of where the work is performed. Remote workers living in Minnesota who work for employers in other states owe Minnesota income tax on all their earnings. Minnesota also uses a 'convenience of the employer' rule: if you work remotely from Minnesota for a Minnesota employer, your income is Minnesota-sourced even for days worked outside the state. Non-residents working in Minnesota owe Minnesota income tax only on Minnesota-sourced income.
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FAQ

Frequently Asked Questions

What is Minnesota's income tax rate for 2026?

Minnesota has four income tax brackets for 2026: 5.35% on income up to $31,690, 6.80% from $31,690 to $104,090, 7.85% from $104,090 to $193,240, and 9.85% above $193,240 (single filer thresholds). The effective rate is always lower than the marginal rate — a $100,000 single filer pays approximately $5,023 in state tax, an effective rate of about 5.02%.

Does Minnesota tax Social Security benefits?

Yes — Minnesota is one of nine states that taxes Social Security benefits. However, since 2023, Minnesota has provided a partial exemption: Social Security is fully exempt if your adjusted gross income is below $75,000 (single) or $100,000 (married filing jointly). Above those thresholds, benefits are phased back into taxable income up to the federal taxable amount.

Does Minnesota have an estate tax?

Yes. Minnesota levies an estate tax at rates from 13% to 16% on estates above $3 million. This threshold is significantly lower than the federal exemption (~$13.6M in 2026), meaning many estates not subject to federal estate tax still owe Minnesota estate tax. Planning considerations: the MN exemption is not portable between spouses without a credit shelter trust.

What is Minnesota's standard deduction for 2026?

Minnesota's standard deduction for 2026 is $14,575 for single filers and $29,150 for married filing jointly — matching the federal standard deduction amounts. Minnesota also allows a $4,800 personal exemption per person (phases out above $220,650 for single filers), providing additional reduction in taxable income.

Are capital gains taxed differently in Minnesota?

No — Minnesota taxes capital gains as ordinary income using the same four brackets (5.35%–9.85%). There is no preferential capital gains rate in Minnesota, unlike the federal system where long-term capital gains are taxed at 0%, 15%, or 20%. A Minnesota resident with large long-term capital gains in the top bracket pays 9.85% state tax plus 20% federal, for a combined rate of approximately 29.85%.

Is Minnesota a good state to retire in for taxes?

Minnesota is mixed for retirees. Retirement account withdrawals (401k, IRA) are fully taxable as ordinary income. Social Security is partially taxable above $75,000 AGI. However, groceries and clothing are exempt from sales tax, and property taxes can be partially offset by Minnesota's property tax refund program. Compared to Florida, Texas, or Tennessee, Minnesota's tax burden on retirees is substantially higher.

How does Minnesota's 9.85% top rate compare to other states?

Minnesota's 9.85% top rate is among the highest in the US — lower only than California (13.3%), Hawaii (11%), and New Jersey (10.75%), and similar to Oregon (9.9%). In the Midwest, Minnesota's top rate is the highest by a significant margin: Wisconsin tops at 7.65%, Iowa at 3.9% (flat), and neighboring South Dakota has no income tax at all.

Does Minnesota have a local income tax?

No — Minnesota does not allow cities or counties to levy local income taxes. The 9.85% top rate is purely a state tax. This is a contrast to Ohio, Michigan, and Maryland where localities add substantial income taxes on top of state rates.

What income is exempt from Minnesota income tax?

Minnesota exempts: federal bond interest, railroad retirement benefits, and qualifying Social Security income (below $75,000 AGI single). Groceries and clothing are exempt from sales tax. Public pension income (MSRS, PERA, TRA) is fully taxable in Minnesota — a significant consideration for state and local government retirees.

How does Minnesota tax remote workers?

Minnesota residents owe Minnesota income tax on all income regardless of where work is performed. Remote workers living in Minnesota pay Minnesota rates on all earnings. Non-residents only owe Minnesota tax on income earned within Minnesota. If you're considering relocating from Minnesota to a no-income-tax state, establishing genuine domicile in the new state is required before Minnesota stops taxing your income.
Disclaimer:This guide is for educational purposes only and does not constitute tax or financial advice. Minnesota income tax brackets and thresholds are adjusted annually for inflation. Rates shown reflect 2026 tax year estimates based on official Minnesota Department of Revenue data. Consult a qualified tax professional for advice specific to your situation.
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