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HEAD-TO-HEAD TAX COMPARISON · 2026

COUNTRY A Pennsylvania VS COUNTRY B Minnesota

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

Daniel · CountryTaxCalc Updated August 2026 Tax Comparison 2026
Calculate your take-home → See all comparisons →
OVERVIEW
Pennsylvania's flat 3.07% income tax rate is dramatically lower than Minnesota's progressive rate, which climbs to a top bracket of 9.85% — the third-highest in the country behind only California and Hawaii. At $100,000 income, Pennsylvania's state tax bill ($2,576) is $2,646/year lower than Minnesota's ($5,222), and the gap widens to more than $27,100/year at $500,000. Minnesota's average effective property tax rate (~1.08%) is somewhat lower than Pennsylvania's (~1.49%), which narrows the gap slightly for homeowners but does not come close to erasing Pennsylvania's income-tax advantage at any income level shown. Philadelphia residents pay an additional 3.79% city wage tax on top of Pennsylvania's state rate, while Minnesota has no local income tax anywhere. On retirement income, Pennsylvania fully exempts Social Security, pensions, and 401(k)/IRA withdrawals at any age, while Minnesota only partially exempts Social Security (fully exempt below $82,190 single/$105,380 married) and taxes pensions and 401(k)/IRA withdrawals in full at up to 9.85%.
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
Pennsylvania
TAX RATE
3.07%
Flat Tax
Flat 3.07% state rate on all income; Philadelphia residents add 3.79% city wage tax
❄️
COUNTRY B
Minnesota
TAX RATE
5.35-9.85%
4-Bracket Progressive
Progressive 5.35%-9.85%; top rate is the 3rd-highest in the nation, applying above $203,150
TYPICAL ANNUAL DIFFERENCE
Moving from Minnesota → Pennsylvania at $100,000
$2,646
That's $221/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
🔔 PA TAX
❄️ MN TAX
SAVINGS
10-YEAR
$50,000
$1,041
$1,822
$781
$7,810
$75,000
$1,808
$3,522
$1,714
$17,140
$100,000
$2,576
$5,222
$2,646
$26,460
$150,000
$4,111
$8,879
$4,768
$47,680
$250,000
$7,181
$17,344
$10,163
$101,630
$500,000
$14,856
$41,969
$27,113
$271,130
💡

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🔔

Pennsylvania Pros & Cons

+ PROS
  • Flat 3.07% state income tax crushes Minnesota's progressive rate (topping out at 9.85%) at every income level — saving $781 to $27,113/year
  • Full retirement-income exemption: Social Security, pensions, and 401(k)/IRA withdrawals are all tax-free at the state level, at any age
  • No local income tax outside Philadelphia — most Pennsylvania residents pay only the flat 3.07% state rate with no city add-on
  • Two lower-cost major metros — Philadelphia and Pittsburgh — with strong healthcare, higher-education, and robotics/tech employers
− CONS
  • Higher average property tax (~1.49%) than Minnesota (~1.08%) — a real but relatively minor offset to PA's much larger income-tax advantage
  • Philadelphia residents pay an additional 3.79% city wage tax, pushing their combined rate to 6.86%
  • Pennsylvania levies an inheritance tax on transfers to non-spouse heirs (4.5%-15%) — Minnesota's estate tax only applies above $3 million and is structured differently
  • Fewer Fortune 500 corporate headquarters than the Minneapolis-Saint Paul metro
❄️

Minnesota Pros & Cons

+ PROS
  • Lower average property tax (~1.08%) than Pennsylvania (~1.49%), a modest saving for homeowners
  • No local income tax anywhere in the state, unlike Philadelphia's 3.79% add-on for Pennsylvania residents
  • Nation-leading healthcare quality and strong K-12 education funded by the state's tax base
  • Deep Fortune 500 presence in the Twin Cities (Target, Best Buy, 3M, UnitedHealth, Medtronic, General Mills) offering high salaries
− CONS
  • Progressive rate reaches 9.85% — the third-highest top marginal state income tax rate in the country — costing residents $781 to $27,113/year more than Pennsylvania across the income range shown
  • Social Security is only partially exempt (fully taxable above $82,190 single/$105,380 married AGI), and pensions/401(k)/IRA withdrawals are fully taxable up to 9.85% — Pennsylvania exempts all retirement income entirely
  • Minnesota levies an estate tax on estates above $3 million, with rates from 13% to 16% — a real consideration for high-net-worth retirees
  • Harsh winters and a smaller overall population base than Pennsylvania's two-metro corridor
FAQ

Frequently Asked Questions

Is Pennsylvania or Minnesota cheaper for state income tax?

Pennsylvania is dramatically cheaper at every income level. At $100,000, Pennsylvania's flat 3.07% costs $2,576 versus Minnesota's progressive rate at $5,222 — a $2,646/year difference. At $500,000, the gap grows to more than $27,100/year. Minnesota's top 9.85% bracket, which applies to all taxable income above $203,150, is the third-highest state income tax rate in the country.

Which state has lower property tax, Pennsylvania or Minnesota?

Minnesota has the lower average effective property tax rate at roughly 1.08%, compared to Pennsylvania's roughly 1.49%. On a $400,000 home, that's about $4,320/year in Minnesota versus $5,960/year in Pennsylvania — a savings of about $1,640/year for Minnesota homeowners, though it doesn't come close to closing the much larger income-tax gap.

Does either state tax Social Security and retirement income?

Pennsylvania fully exempts Social Security, pensions, and 401(k)/IRA withdrawals from state tax at any age. Minnesota only partially exempts Social Security — it's fully tax-free below $82,190 (single) or $105,380 (married) in 2026, but taxable above those thresholds — and Minnesota taxes pensions and 401(k)/IRA withdrawals in full at rates up to 9.85%. Pennsylvania is significantly more retirement-friendly.

Does Philadelphia's city wage tax change the comparison?

Yes, for Philadelphia residents specifically. They pay a 3.79% city wage tax on top of the 3.07% state rate — a combined 6.86%. At $100,000 income, that's roughly $6,366 total, which is still well below Minnesota's $5,222 in state tax alone once you add in Minnesota's lack of any local income tax to compare against — but the gap narrows considerably for Philadelphia filers.

How much would I save moving from Minnesota to Pennsylvania?

At $100,000 income, moving from Minnesota to Pennsylvania could save about $2,646/year in state income tax. At $250,000 income, the savings grow to about $10,163/year, and at $500,000 the gap widens to roughly $27,113/year — one of the largest income-tax differentials in any state-to-state comparison on this site.

Does Minnesota have an estate tax that Pennsylvania doesn't?

Minnesota levies an estate tax on estates above $3 million, with rates from 13% to 16%. Pennsylvania has no estate tax, but does levy an inheritance tax on transfers to non-spouse heirs: 4.5% for children and grandchildren, 12% for siblings, and 15% for other beneficiaries. Both states have a form of wealth-transfer tax, but they're structured very differently and apply to different transfers.

Why is Minnesota's top tax rate so high?

Minnesota's 9.85% top bracket, which applies to taxable income above $203,150 (single filer), is the third-highest state income tax rate in the nation, trailing only California (13.3%) and Hawaii (11%). The state uses this revenue to fund a healthcare system and K-12 education system that both rank among the best nationally, which is part of the tradeoff residents weigh against the higher tax burden.

Is the Twin Cities or Philadelphia/Pittsburgh better for job opportunities?

The Minneapolis-Saint Paul metro has an unusually dense concentration of Fortune 500 headquarters for its size — Target, Best Buy, 3M, UnitedHealth, Medtronic, and General Mills are all based there — offering high salaries that can offset some of Minnesota's tax disadvantage. Pennsylvania's strengths are Philadelphia (finance, healthcare, pharma) and Pittsburgh (robotics, autonomous vehicles, Carnegie Mellon), typically at a somewhat lower cost of living than the Twin Cities.
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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