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HEAD-TO-HEAD TAX COMPARISON · 2026

COUNTRY A Minnesota VS COUNTRY B Florida

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

Daniel · CountryTaxCalc Updated May 2026 Tax Comparison 2026
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OVERVIEW
Minnesota consistently ranks as one of the worst states for retirees from a tax perspective. The top rate of 9.85% is among the highest in the country, and Minnesota is one of only a handful of states that taxes Social Security benefits — specifically for higher-income retirees. Taxpayers with incom…
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
Minnesota
TAX RATE
5.35–9.85%
Taxes Social Security, High Rates
Progressive 5.35–9.85%; one of only a few states that taxes Social Security benefits for higher earners
🌴
COUNTRY B
Florida
TAX RATE
0%
No Income Tax
Zero state income tax on all retirement income sources
TYPICAL ANNUAL DIFFERENCE
Moving from Florida → Minnesota at $100,000
$6,200
Florida saves approximately $6,200/year vs Minnesota at $100K retirement income. Minnesota is one of only a few states that taxes Social Security for higher earners — meaning retirees with total income above ~$105K see their SS benefits included in taxable income.
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
❄️ MN TAX
🌴 FL TAX
SAVINGS
10-YEAR
$50,000 retirement
~$2,675
$0
FL saves ~$2,675/yr
$26,750
$75,000 retirement
~$4,665
$0
FL saves ~$4,665/yr
$46,650
$100,000 retirement
~$6,229
$0
FL saves ~$6,229/yr
$62,290
$150,000 retirement
~$10,302
$0
FL saves ~$10,302/yr
$103,020
$250,000 retirement
~$19,486
$0
FL saves ~$19,486/yr
$194,860
💡

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❄️

Minnesota Pros & Cons

+ PROS
  • Excellent healthcare infrastructure (Mayo Clinic, University of Minnesota Medical Center)
  • Strong family and community ties throughout the Upper Midwest
  • Lower property insurance costs: $1,200–$2,200/year vs Florida's $4,000–$8,000+
  • Four seasons with genuine autumn and spring
− CONS
  • Top rate of 9.85% — one of the highest in the US
  • Social Security taxed for retirees with income above ~$105,380 (married) — few states do this
  • All pension and IRA income taxed as ordinary income; no retirement income exclusion
  • Brutal winters mean high heating costs and potential healthcare disruption
  • RMDs from traditional retirement accounts fully taxed at marginal rates up to 9.85%
  • State estate tax on estates above ~$3M (unlike Florida which has no estate tax)
🌴

Florida Pros & Cons

+ PROS
  • Zero state income tax — no SS taxation, no pension tax, no IRA withdrawal tax
  • No estate or inheritance tax
  • Homestead Exemption up to $50,000 on primary residence
  • Year-round warmth eliminates heating and winter maintenance costs
  • Established retirement communities with healthcare and amenities
− CONS
  • Property insurance crisis: $4,000–$8,000+/year — far exceeds Minnesota costs
  • Hurricane and flooding risk
  • High summer heat and humidity
  • Significant distance from Minnesota family and community
FAQ

Frequently Asked Questions

Does Minnesota tax Social Security benefits?

Yes — Minnesota is one of only nine states that taxes Social Security benefits at the state level. Minnesota exempts Social Security for taxpayers with income below certain thresholds: approximately $75,000 (single) and $105,380 (married filing jointly) in 2024, with phase-outs above those amounts. Higher-income retirees see their full Social Security benefit included in taxable Minnesota income. At $150,000 total income, most or all of your Social Security is taxed at Minnesota's progressive rates (up to 9.85%). Florida does not tax Social Security at any income level.

Is there a pension exemption in Minnesota?

No. Minnesota does not offer a general pension exclusion or retirement income deduction. All pension income, IRA and 401(k) withdrawals, and RMDs are included in taxable Minnesota income and subject to progressive rates from 5.35% to 9.85%. This distinguishes Minnesota from states like Georgia ($65,000 exclusion for 65+) and South Carolina ($15,000 deduction). Military pensions are also fully taxable in Minnesota, another contrast with more retiree-friendly states.

What is the Minnesota-to-Florida income tax saving for a typical retiree?

For a married couple with $120,000 in retirement income (pension + IRA withdrawals, Social Security separately), the Minnesota state income tax would be approximately $7,500–$8,500 per year. In Florida: $0. Over a 20-year retirement, that's $150,000–$170,000 in state income tax. If Social Security is included in the $120K figure and Minnesota taxes part of it, the gap is even larger. Florida's property insurance ($4,000–$7,000/year more than Minnesota) reduces but does not eliminate this advantage.

What are Minnesota's income tax brackets for retirees?

Minnesota has four brackets: 5.35% on taxable income up to $30,070 (single); 6.8% from $30,070 to $98,760; 7.85% from $98,760 to $183,340; 9.85% above $183,340. These are approximate 2026 single filer thresholds (annually inflation-adjusted). Married filing jointly thresholds are approximately double. Retirement income — including pensions, IRA withdrawals, and any taxable Social Security — is added together to determine which brackets apply. High-income retirees quickly reach the 7.85% or 9.85% bracket.

Is Minnesota a good state to retire in despite the high taxes?

Minnesota offers significant non-tax advantages for retirees: world-class healthcare at Mayo Clinic, strong social services, lower costs than coastal states, and four seasons. For retirees with modest income — primarily Social Security below the taxation threshold — Minnesota's tax burden is manageable. For higher-income retirees drawing $150,000+/year from pensions and IRAs, the combined state tax of $10,000–$20,000/year is a powerful financial argument to relocate. The decision depends heavily on family ties, healthcare needs, and income level.

How do I establish Florida residency from Minnesota to stop paying Minnesota taxes?

To stop paying Minnesota income tax, you must establish Florida as your domicile and spend 183 or more days per year in Florida. Required steps: obtain a Florida driver's license, register to vote in Florida, file a Florida Declaration of Domicile, change your primary bank accounts and professional affiliations to Florida, and minimise days spent in Minnesota. Minnesota audits high-income taxpayers claiming to have changed domicile, examining credit card records, phone records, and healthcare visits. Consulting a CPA before and during the transition is strongly recommended.
From the brief
PT38.4%−9.6 vs. headline
CY17.8%incl. 60-day rule
AE 0.0%substance required
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