Minnesota Income Tax Guide: Rates, Brackets & Deductions for 2026

Minnesota has progressive income tax rates from 5.35% to 9.85% — making it one of the highest-tax states in the nation. That 9.85% top rate is among the 5 highest in America.

But here’s what the headlines miss: most Minnesota residents don’t pay anywhere near 9.85%. The top rate for 2026 only kicks in at $203,150 (single) or $337,930 (married) — inflation-indexed thresholds that rise slightly each year.

Minnesota residents do get something for those taxes: consistently top-ranked public schools, strong infrastructure, and quality healthcare. Whether that tradeoff works for you depends on your income level and priorities.

See how Minnesota compares to all states: State Income Tax Rates

Minnesota Income Tax Rates for 2026

Minnesota uses a four-bracket progressive system. Your income is taxed at each rate as it passes through the brackets — not all at the top rate you reach. This means the effective rate (what you actually pay as a percentage of total income) is always lower than your marginal rate (the rate on your next dollar of income).

For context on where you fall nationally, check our income percentile calculator.

Single & Married Filing Separately

Married Filing Jointly

Head of Household

Confirm the current-year Head of Household thresholds with the Minnesota Department of Revenue, as these fall between the single and married brackets and are inflation-indexed annually.

Minnesota Tax Calculator Examples

Example 1: $75,000 Single Filer

A single filer earning $75,000 pays just over 6% of their income in state tax — not the headline 7.85% bracket rate. See our detailed breakdown of what $75,000 a year means for take-home pay.

Example 2: $150,000 Married Filing Jointly

Even at $150,000 combined income, the effective rate stays in the low-to-mid 6% range. The 9.85% rate only applies to income above $337,930 for married couples in 2026.

Minnesota Standard Deduction (2026)

Minnesota’s standard deduction has historically matched the federal amount. Confirm the current-year figures with the Minnesota Department of Revenue, as they should track the 2026 federal amounts ($16,100 single / $32,200 married filing jointly / $24,150 head of household) but this was not independently re-verified against a live MN source this session.

Tip: Most Minnesotans benefit from taking the standard deduction. Itemizing only makes sense if your mortgage interest, property taxes, and charitable contributions exceed these amounts. Note that the federal SALT deduction cap was raised to $40,000 for 2025 (rising to about $40,400 for 2026) under the One Big Beautiful Bill Act, which changes the itemizing calculus for many higher-income Minnesotans compared to the prior $10,000 cap.

Minnesota Tax Credits

Minnesota offers several valuable tax credits that can significantly reduce your tax bill — some are refundable, meaning you can receive money back even if you owe no tax. Confirm current amounts and thresholds with the Minnesota Department of Revenue, as these figures are periodically adjusted:

Working Family Credit

Minnesota’s version of the Earned Income Tax Credit:

• Based on income and family size
• Refundable credit
• Phase-out at higher incomes

Child and Dependent Care Credit

Confirm current AGI thresholds and credit rates with the Minnesota Department of Revenue.

K-12 Education Subtraction

Confirm current per-child maximum amounts with the Minnesota Department of Revenue. It applies to private school tuition AND public school expenses like curriculum materials, tutoring, and educational software.

What Income is Taxed in Minnesota?

Taxed:

• Wages and salaries
• Self-employment income
• Interest and dividends
• Capital gains
• Retirement income (401(k), IRA distributions)
• Rental income
• Business income

Not taxed:

• Social Security benefits (partially — see below)
• Municipal bond interest (MN bonds)
• Military retirement pay (limited exemption)

Social Security Taxation

Minnesota taxes Social Security benefits but provides a subtraction based on federal AGI thresholds. Confirm the current-year thresholds with the Minnesota Department of Revenue, as these are inflation-indexed annually and were not independently re-verified this session.

Good news for most retirees: If your income is below the current thresholds, Minnesota effectively doesn’t tax your Social Security. Higher-income retirees will still pay some tax on benefits. For more on retirement benefits, see our Social Security benefits guide.

Minnesota vs. Neighboring States

Minnesota has significantly higher income taxes than all neighbors. If you live near the border, this matters.

However: Lower-tax states often have higher property taxes or sales taxes to compensate, and may offer fewer public services. See cost of living by state for the full picture.

Local Income Taxes

Minnesota does not have local income taxes. Only the state tax applies.

Filing Minnesota State Taxes

Minnesota Property Tax

Confirm the current average effective property tax rate with the Tax Foundation or Minnesota Department of Revenue, as this figure was not independently re-verified this session. Minnesota property taxes have historically been above the national average, and Property Tax Refund programs are available for lower-income residents.

Tips to Reduce Minnesota Taxes

1. Max retirement contributions — 401(k), IRA contributions reduce taxable income directly
2. Use HSA — Triple tax advantage (deductible, grows tax-free, tax-free withdrawals for medical)
3. Itemize if beneficial — SALT, mortgage interest; the federal SALT cap rose to $40,000 for 2025 (about $40,400 for 2026), which may make itemizing worthwhile for more filers than under the prior $10,000 cap
4. Claim education subtraction — K-12 expenses including tutoring and educational materials
5. Working Family Credit — if income-eligible, don’t miss this refundable credit
6. Municipal bonds — MN bonds are state tax-free, but compare yields to taxable alternatives

Is Minnesota Worth the High Taxes?

Pros:

• Strong public schools and infrastructure (widely cited, though rankings vary by source)
• Quality healthcare system
• Low unemployment (historically)

Cons:

• Among the highest marginal rates in the US
• Cold winters
• Property taxes also above average

Minnesota Tax Authority

Minnesota Department of Revenue

• Website: revenue.state.mn.us
• Phone: 651-296-3781
• For refunds, returns, and questions

Minnesota Retirement Income Taxes

Minnesota taxes retirement income more aggressively than most states, but partial exemptions exist for lower and middle-income retirees.

Social Security Taxes in Minnesota

Minnesota is one of a small number of states that taxes Social Security benefits. However, most retirees qualify for a full or partial exemption based on income — confirm the current thresholds with the Minnesota Department of Revenue, as they are inflation-indexed annually.

Pension and Retirement Account Income

Minnesota taxes pension income and traditional IRA/401(k) withdrawals as ordinary income at full state rates (5.35%-9.85%). There is no blanket exclusion for pensions the way states like Illinois offer. However, the standard deduction and personal exemptions reduce the taxable amount.

For retirees with significant pension income, Minnesota’s tax burden can be substantial compared to neighboring states like South Dakota (no income tax) or Wisconsin. Some high-income retirees establish residency in a no-income-tax state before retirement specifically to reduce Minnesota income tax on pension and IRA distributions — a legal strategy if the domicile change is genuine and complete.

Minnesota Remote Work Tax Rules

Minnesota taxes income earned while physically working in Minnesota, regardless of where your employer is located. For Minnesota residents working remotely for out-of-state companies, all wages are Minnesota-taxable.

Non-residents working remotely from Minnesota (e.g., temporarily staying while working) may owe Minnesota tax on income earned during that period if they spend sufficient time in the state. Minnesota does not have broad reciprocity agreements eliminating this obligation, though it does have agreements with select neighboring states that may reduce filing complexity for border workers.

Bottom Line

Minnesota has progressive income tax rates from 5.35% to 9.85%, with the top rate for 2026 applying to income over $203,150 (single) or $337,930 (married). While high compared to most states, Minnesota provides education tax credits and a Working Family Credit. High earners pay some of the highest state taxes in the country.

For most households: Your effective rate will be in the mid-single digits, not the headline 9.85% rate. The real pain hits at incomes well above the top-bracket thresholds.

Related: State Income Tax Rates | Income Percentile Calculator | 401(k) Contribution Limits | Michigan Income Tax Guide | Missouri Income Tax Guide | Cost of Living by State

Written by WealthVieu

WealthVieu researches and writes data-driven personal finance guides using primary sources including the IRS, Bureau of Labor Statistics, Federal Reserve, and Census Bureau.