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HEAD-TO-HEAD TAX COMPARISON · 2026

COUNTRY A New Jersey VS COUNTRY B Minnesota

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

Daniel · CountryTaxCalc Updated August 2026 Tax Comparison 2026
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OVERVIEW
New Jersey's income tax is cheaper than Minnesota's at every income level compared here, because Minnesota's lowest bracket (5.35%) already starts above New Jersey's lowest three brackets (1.4% to 5.525%). At $100,000 income, New Jersey's state tax bill ($3,218) is $2,004/year lower than Minnesota's ($5,222), and the gap widens to $4,571/year at $250,000. New Jersey pushes back with the highest average property tax rate in the nation (tied with Illinois at roughly 1.88%), well above Minnesota's roughly 1.12%, which meaningfully narrows New Jersey's overall tax advantage for homeowners. Neither state offers a broad exemption for retirement income: New Jersey excludes up to $100,000 (married) or $75,000 (single) of pension/retirement income but only if total income is $100,000 or less, while Minnesota taxes most retirement income including Social Security, though it does offer a Social Security subtraction for many filers.
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
New Jersey
TAX RATE
1.4-10.75%
7-Bracket Progressive
Seven brackets from 1.4% to 10.75%, with the top rate starting at $1,000,000 of taxable income
❄️
COUNTRY B
Minnesota
TAX RATE
5.35-9.85%
4-Bracket Progressive
Four brackets from 5.35% to 9.85%, with the top rate applying above roughly $193,000 for single filers
TYPICAL ANNUAL DIFFERENCE
Moving from Minnesota → New Jersey at $100,000
$2,004
That's $167/month back in your pocket
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
🌊 NJ TAX
❄️ MN TAX
SAVINGS
10-YEAR
$50,000
$523
$1,822
$1,299
$12,990
$75,000
$1,762
$3,522
$1,760
$17,600
$100,000
$3,218
$5,222
$2,004
$20,040
$150,000
$6,403
$8,879
$2,476
$24,760
$250,000
$12,773
$17,344
$4,571
$45,710
💡

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🌊

New Jersey Pros & Cons

+ PROS
  • Low starting brackets (1.4% to 5.525%) keep New Jersey cheaper than Minnesota at every income level shown, saving $1,299 to $4,571/year
  • No broad tax on Social Security income, unlike Minnesota which taxes most retirement income
  • Deep, high-paying job market in finance, pharmaceuticals, and logistics, with easy access to New York City and Philadelphia
  • Pension/retirement income exclusion up to $100,000 (married) or $75,000 (single) for filers with total income at or below $100,000
− CONS
  • Highest average property tax rate in the nation (tied with Illinois at ~1.88%), well above Minnesota's ~1.12%, which narrows the overall savings for homeowners
  • Retirement income exclusion phases out entirely once total income exceeds $100,000 — no benefit for higher-income retirees
  • High cost of living overall, especially in North Jersey commuter towns near New York City
  • Complex 7-bracket structure that climbs quickly, reaching 10.75% for income above $1,000,000
❄️

Minnesota Pros & Cons

+ PROS
  • Much lower average property tax (~1.12%) than New Jersey's ~1.88%, tied for the highest in the nation
  • Simpler 4-bracket structure compared to New Jersey's 7 brackets
  • Strong Twin Cities job market in healthcare, finance, and technology, with a lower overall cost of living than the New York metro area
  • Social Security subtraction available for many filers, reducing the effective tax on retirement benefits despite no full exemption
− CONS
  • Higher tax at every income level shown — costs $1,299 to $4,571/year more than New Jersey
  • Taxes most retirement income including Social Security (with only a partial subtraction), unlike New Jersey's full Social Security exemption
  • Lowest bracket (5.35%) already exceeds New Jersey's bottom three brackets combined, so there's no low-income advantage
  • Smaller, more regionally concentrated job market than New Jersey's access to the New York and Philadelphia metro economies
FAQ

Frequently Asked Questions

Is New Jersey or Minnesota cheaper for state income tax?

New Jersey is cheaper at every income level compared here. Its low starting brackets (1.4% to 5.525%) beat Minnesota's lowest bracket of 5.35%. At $100,000, New Jersey's $3,218 is $2,004/year less than Minnesota's $5,222, and the gap grows to $4,571/year at $250,000.

Which state has lower property tax, New Jersey or Minnesota?

Minnesota has the lower average effective property tax rate at roughly 1.12%, compared to New Jersey's roughly 1.88% — tied with Illinois for the highest in the nation. On a $400,000 home, that's about $4,480/year in Minnesota versus $7,520/year in New Jersey, a difference of about $3,040/year that meaningfully offsets New Jersey's income-tax advantage.

Does either state tax Social Security benefits?

New Jersey does not tax Social Security income at all. Minnesota taxes Social Security as part of overall income but offers a subtraction that reduces or eliminates the tax for many filers, particularly those with lower total income. Higher-income Minnesota retirees are more likely to owe state tax on a portion of their benefits.

How much would I save moving from Minnesota to New Jersey?

At $100,000 income, moving from Minnesota to New Jersey could save about $2,004/year in state income tax. However, New Jersey's much higher property tax (roughly $3,040/year more on a comparable $400,000 home) offsets a large share of that — so the net savings depend heavily on whether you own a home and its value.

Does New Jersey tax pension and 401(k) income?

New Jersey excludes up to $100,000 of pension and retirement income for married filers ($75,000 for single filers), but only if total income is $100,000 or less — the exclusion disappears entirely above that threshold. Minnesota taxes most retirement income as ordinary income, with only a partial Social Security subtraction.

How do the job markets compare between New Jersey and Minnesota?

New Jersey offers access to two of the country's largest metro economies — New York City and Philadelphia — with strong pharmaceutical, finance, and logistics sectors. Minnesota's Twin Cities (Minneapolis-St. Paul) region has a strong healthcare, finance, and technology base, typically at a lower cost of living than the New York metro area.

Why does New Jersey's property tax matter so much in this comparison?

New Jersey has the highest average property tax rate in the nation (tied with Illinois at roughly 1.88%), nearly double Minnesota's roughly 1.12%. For homeowners with a typical-value home, this can offset $2,000-$3,000+ per year of New Jersey's income-tax savings, so the overall winner depends heavily on whether you rent or own and your home's value.
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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