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HEAD-TO-HEAD TAX COMPARISON · 2026

COUNTRY A California VS COUNTRY B Minnesota

Side-by-side analysis of income tax, effective rates, and take-home pay for California and Minnesota in 2026.

Daniel · CountryTaxCalc Updated June 2026 Tax Comparison 2026
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OVERVIEW
Both California and Minnesota are high-tax states, but they hit different income profiles. California's 13.3% top rate is the highest in the nation, but it only applies above $1 million — the 1% Mental Health Services Act surtax is the culprit. Minnesota's 9.85% top rate is punishing earlier, kicking in at $183,341 for single filers in 2026. At $100,000 income, the two states are nearly tied: a Minnesota resident pays roughly $5,277 in state income tax versus California's $5,208 — California is actually about $69/year cheaper at this income. Minnesota's real advantage only appears above roughly $102,700 income; at $200,000, Minnesota saves you roughly $1,641 annually. Minnesota's standard deduction ($15,300) and personal exemption ($4,800) meaningfully reduce taxable income versus California's modest $5,706 deduction. Minnesota also exempts Social Security for lower earners (fully exempt below $75K AGI) and exempts groceries from sales tax. The critical wildcard: Minnesota levies an estate tax at 13%–16% on estates above $3 million — California has no estate tax. Property taxes are modestly higher in Minnesota (1.00%) versus California (0.70% under Prop 13 caps). For high earners above $500K and especially above $1M, California is more expensive. For lower-to-middle earners (below about $102,700), California is actually the cheaper state on income tax alone — and Minnesota's estate tax can matter significantly for wealth transfer planning at the high end.
Section 01

The Big Picture

Top-line rates and effective take-home for a typical earner — including income tax, social contributions, and applicable surcharges.

🌴
COUNTRY A
California
TAX RATE
13.3%
Highest in Nation

10 progressive brackets from 1% to 13.3% (incl. 1% MHSA surtax above $1M)

❄️
COUNTRY B
Minnesota
TAX RATE
9.85%
High-Tax Midwest

4 progressive brackets from 5.35% to 9.85%; top rate kicks in at $183,341 (single)

TYPICAL ANNUAL DIFFERENCE
Moving from California → Minnesota at $100,000
$69

That's $6/month more than staying in California

Section 02

Tax Savings by Income Level

Net take-home after all income tax, social contributions, and surcharges — for a single employee with no dependents.

GROSS INCOME
🌴 CA TAX
❄️ MN TAX
SAVINGS
10-YEAR
$50,000
$1,193
$1,877
-$684
-$6,840
$75,000
$2,928
$3,577
-$649
-$6,490
$100,000
$5,208
$5,277
-$69
-$690
$150,000
$9,858
$8,942
$916
$9,160
$200,000
$14,508
$12,867
$1,641
$16,410
$500,000
$44,121
$42,048
$2,073
$20,730
💡

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🌴

California Pros & Cons

+ PROS
  • No estate tax (California abolished it)
  • Prop 13 caps keep property tax low (0.70%)
  • Social Security fully exempt from CA tax
  • Tech and entertainment economy — highest earner salaries
− CONS
  • Highest income tax in the nation (13.3%)
  • Modest standard deduction ($5,706 single)
  • Sales tax 7.25% base — up to 10.5% with local add-ons
  • Capital gains taxed as ordinary income up to 13.3%
❄️

Minnesota Pros & Cons

+ PROS
  • Higher standard deduction ($15,300) + personal exemption ($4,800)
  • Social Security exempt below $75K AGI (single)
  • Groceries exempt from sales tax
  • Lower income tax than CA at most income levels below $500K
− CONS
  • Estate tax at 13%–16% on estates above $3M
  • Higher property tax than CA (1.00% vs 0.70%)
  • Top rate of 9.85% hits at just $183,341 (single)
  • Capital gains taxed as ordinary income up to 9.85%
FAQ

Frequently Asked Questions

Which state has higher income tax — California or Minnesota?

California has the higher top rate at 13.3%, versus Minnesota's 9.85%. However, California's 13.3% only applies above $1 million (it includes the 1% Mental Health Services Act surtax). Minnesota's 9.85% top rate applies from $183,341 (single, 2026), so Minnesota is proportionally more punishing at upper-middle incomes between $183K and $1M. At $200,000 income, California takes about $14,508 versus Minnesota's $12,867 — a difference of roughly $1,641 per year.

How much do I save in income tax moving from California to Minnesota at $100,000?

At $100,000 single filer income in 2026, a California resident pays approximately $5,208 in state income tax (about 5.21% effective rate). A Minnesota resident earning the same pays approximately $5,277 (about 5.28% effective rate) — essentially a tie, with California actually about $69/year cheaper. Minnesota's larger standard deduction ($15,300 vs California's $5,706) plus a $4,800 personal exemption very nearly closes the entire gap at this income level; Minnesota's real savings don't appear until income passes roughly $102,700.

Does Minnesota have an estate tax?

Yes — and this is one of the most important differences between the two states for wealth planning. Minnesota imposes an estate tax at rates from 13% to 16% on estates above $3 million. California has no estate tax. For individuals with estates above $3M — including home equity, investment accounts, and business interests — Minnesota can represent a significant inheritance cost compared to California.

How do property taxes compare between California and Minnesota?

Minnesota's effective property tax rate averages about 1.00%, while California averages approximately 0.70% — held down by Proposition 13, which caps annual assessment increases for long-term owners. On a $500,000 home: Minnesota roughly $5,000/year versus California roughly $3,500/year, a gap of about $1,500 annually. This partially offsets the income tax savings Minnesota offers at lower income levels.

Is Social Security taxed in California and Minnesota?

California fully exempts Social Security benefits from state income tax — all retirement income from Social Security is tax-free regardless of income level. Minnesota has a partial exemption: Social Security is fully exempt if your federal adjusted gross income is below $75,000 (single) or $100,000 (married filing jointly). Above those thresholds, a portion becomes taxable. For retirees relying heavily on Social Security, California's blanket exemption is more valuable.

How are capital gains taxed in California vs Minnesota?

Both states tax capital gains as ordinary income — there is no preferential long-term capital gains rate at the state level in either jurisdiction. In California, long-term capital gains face the same rates as wages, up to 13.3%. In Minnesota, capital gains are taxed up to 9.85%. Investors and founders realizing large capital events (business sales, stock vesting, property sales) will pay more in California than Minnesota, especially on gains above $1 million where California's 13.3% applies.

Which state has a better sales tax rate?

Minnesota's base sales tax rate is 6.875%, and crucially it exempts groceries and prescription drugs. California's base rate is 7.25%, climbing to 9%–10.5% in many counties and cities once local taxes are added. Minnesota's grocery exemption is a meaningful household cost advantage, particularly for families.

At what income level does California overtake Minnesota on total tax burden?

For a single filer, California is actually the cheaper state at lower incomes — about $684 cheaper at $50K and roughly $69 cheaper at $100K. Minnesota only starts saving you money above roughly $102,700 in income, and that gap widens as income rises toward $500K (Minnesota saves about $2,073/year at $500K). Above approximately $1 million, California's 13.3% rate (versus Minnesota's 9.85%) creates an even larger gap in Minnesota's favor — a $2M earner in California pays roughly $46,300 more in state income tax than the same earner in Minnesota. The estate tax consideration runs the other direction: high-net-worth individuals face 13%–16% Minnesota estate tax versus zero in California.
From the brief
NL27%new 2027 rate, down from 30%
DK65.4kkr/mo threshold, cut from 78k
MT1940snon-dom regime unchanged since
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