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Minnesota Income Tax Guide 2026 | Rates, Brackets & Calculator

Daniel · CountryTaxCalc Updated October 2026
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KEY INSIGHT
At $100,000 gross income, a Minnesota single filer pays approximately $5,277 in state income tax — an effective rate of 5.28%. Minnesota's top rate of 9.85% is among the highest in the Midwest, applying to income above $203,150 for single filers.
At a glance

Key Facts

Income Tax Brackets (2026)
4 brackets: 5.35% on $0-$33,310; 6.80% on $33,310-$109,430; 7.85% on $109,430-$203,150; 9.85% above $203,150 (single filer thresholds)
At $100,000 Income (Single)
Taxable ~$84,700 (after std deduction); tax ~$5,277 (5.28% effective rate)
Standard Deduction
$15,300 (single) / $30,600 (MFJ) — Minnesota's own amount, does not match the federal standard deduction
Personal Exemption
None — Minnesota does not offer a separate personal exemption for 2026
Social Security
Fully subtracted at AGI up to $86,410 (single) / $110,780 (MFJ) for 2026; subtraction phases out above those thresholds
Estate Tax
13%-16% on estates above $3 million — low threshold vs federal ($15M)
Capital Gains
Taxed as ordinary income at up to 9.85% — no preferential rate at state level; extra 1% tax on net investment income above $1 million
Introduction

Minnesota has one of the most progressive income tax systems in the Midwest, with four brackets ranging from 5.35% to 9.85%. The 9.85% top rate — among the highest in the nation — applies to income above $203,150 for single filers. Minnesota also imposes an estate tax on estates above $3 million, with rates from 13% to 16%.

Minnesota sets its own standard deduction ($15,300 single for 2026, distinct from the federal amount) and does not offer a separate personal exemption. Minnesota also fully subtracts taxable Social Security benefits at AGI up to $86,410 (single) or $110,780 (MFJ) for 2026, phasing the subtraction out above that. Minnesota consistently ranks among the top states for quality of life, healthcare, and public education.

Section 01

Minnesota Income Tax Brackets 2026

Minnesota uses a progressive four-bracket system. For single filers in 2026: 5.35% on the first $33,310; 6.80% from $33,310 to $109,430; 7.85% from $109,430 to $203,150; and 9.85% on income above $203,150. For married filing jointly: 5.35% to $48,700; 6.80% to $193,480; 7.85% to $337,930; 9.85% above. Minnesota's 9.85% top rate makes it one of the most progressive income tax states in the Midwest. The brackets are adjusted annually for inflation.

Married Filing Jointly: What You Actually Pay

Using the $30,600 MFJ standard deduction: a couple earning $100,000 gross has taxable income of approximately $69,400 and owes about $4,013 in Minnesota tax (4.01% effective rate). At $150,000 gross, taxable income is approximately $119,400 and Minnesota tax is about $7,413 (4.94% effective). At $250,000 gross, taxable income is approximately $219,400 and Minnesota tax is about $14,485 (5.79% effective) — this is where the couple first reaches the 7.85% bracket.

Section 02

Minnesota Standard Deduction and Personal Exemption

Minnesota sets its own standard deduction, indexed annually for inflation — for 2026 it's $15,300 for single filers and $30,600 for married filing jointly, which does not match the federal standard deduction ($16,100 single / $32,200 MFJ for 2026). Minnesota does not offer a separate personal exemption for 2026. A single filer earning $100,000 has a Minnesota taxable income of approximately $84,700 (after the $15,300 standard deduction).
Section 03

Social Security Tax in Minnesota

Minnesota is one of the few states that taxes Social Security benefits, though a partial exemption has been phased in since 2023. For 2026, taxable Social Security income is fully subtracted at adjusted gross income up to $86,410 (single) or $110,780 (MFJ). Above those thresholds, the subtraction is gradually phased out, so more of the federally taxable benefit is included in Minnesota taxable income. This is an important consideration for retirees choosing between Minnesota and states that fully exempt Social Security income (such as Illinois, Pennsylvania, and New Jersey).
Section 04

Minnesota Estate Tax

Minnesota levies an estate tax on estates above $3 million — one of the lower thresholds in the US. The rates range from 13% to 16% on the taxable estate above the exemption. A $5 million estate would owe roughly $260,000 in Minnesota estate tax (13% of the amount above the $3 million exclusion, before other deductions). The federal estate tax exemption in 2026 is $15 million (raised from $13.99M in 2025 and made permanent under OBBBA), meaning many estates exempt from federal tax still owe Minnesota estate tax. Unlike the federal exemption, Minnesota's $3 million threshold is not portable between spouses without advance planning.
Section 05

Other Minnesota Taxes

Minnesota imposes a 6.875% state sales tax, with local taxes added in many cities and counties. Groceries and clothing are exempt from sales tax — a notable relief compared to neighboring states. Property taxes average approximately 1.12% effective rate statewide, though rates vary significantly by county. Minnesota has no separate capital gains tax rate — capital gains are taxed as ordinary income at the same brackets (up to 9.85% for long-term gains at higher incomes, unlike the federal preferential 15%/20% rate). Minnesota also adds a separate 1% tax on net investment income above $1 million (Minn. Stat. 290.033, effective for tax years beginning after 2023).
Section 06

Minnesota vs Neighboring States

Compared to Wisconsin (4 brackets, 3.50%–7.65% top), Iowa (reduced to 3.8% flat), and South Dakota (no income tax), Minnesota's tax burden is substantially higher. At $100,000 income, a Minnesota resident pays approximately $850 more in state income tax than a Wisconsin resident and $5,000+ more than a South Dakota resident. The difference is partially offset by Minnesota's extensive public services, strong public schools, and high quality of life rankings — Minnesota consistently ranks among the top 10 states for healthcare, education, and infrastructure.
Section 07

Remote Workers and Minnesota Tax

Minnesota taxes income earned by Minnesota residents regardless of where the work is performed. Remote workers living in Minnesota who work for employers in other states owe Minnesota income tax on all their earnings. Minnesota has no 'convenience of the employer' rule: wages a non-resident earns for work performed outside Minnesota for a Minnesota employer are not taxable in Minnesota. Non-residents working in Minnesota owe Minnesota income tax only on Minnesota-sourced income.
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FAQ

Frequently Asked Questions

What is Minnesota's income tax rate for 2026?

Minnesota has four income tax brackets for 2026: 5.35% on income up to $33,310, 6.80% from $33,310 to $109,430, 7.85% from $109,430 to $203,150, and 9.85% above $203,150 (single filer thresholds). The effective rate is always lower than the marginal rate — a $100,000 single filer pays approximately $5,277 in state tax, an effective rate of about 5.28%.

Does Minnesota tax Social Security benefits?

Yes — Minnesota is one of a small number of states that taxes Social Security benefits. However, since 2023, Minnesota has provided a subtraction: taxable Social Security is fully subtracted if your adjusted gross income is at or below $86,410 (single) or $110,780 (married filing jointly) for 2026. Above those thresholds, the subtraction is phased out, so more of the benefit is taxed, up to the federal taxable amount.

Does Minnesota have an estate tax?

Yes. Minnesota levies an estate tax at rates from 13% to 16% on estates above $3 million. This threshold is significantly lower than the federal exemption ($15M in 2026, under OBBBA), meaning many estates not subject to federal estate tax still owe Minnesota estate tax. Planning considerations: the MN exemption is not portable between spouses without a credit shelter trust.

What is Minnesota's standard deduction for 2026?

Minnesota's standard deduction for 2026 is $15,300 for single filers and $30,600 for married filing jointly — Minnesota sets its own amounts, which do not match the federal standard deduction ($16,100 single / $32,200 MFJ). Minnesota does not offer a separate personal exemption for 2026.

Are capital gains taxed differently in Minnesota?

No — Minnesota taxes capital gains as ordinary income using the same four brackets (5.35%–9.85%). There is no preferential capital gains rate in Minnesota, unlike the federal system where long-term capital gains are taxed at 0%, 15%, or 20%. A Minnesota resident with large long-term capital gains in the top bracket pays 9.85% state tax plus 20% federal, for a combined rate of approximately 29.85% (about 30.85% on net investment income above $1 million, because of Minnesota's extra 1% tax; the 3.8% federal net investment income tax is not included).

Is Minnesota a good state to retire in for taxes?

Minnesota is mixed for retirees. Retirement account withdrawals (401k, IRA) are fully taxable as ordinary income. Social Security is partially taxable above $86,410 AGI (single, 2026). However, groceries and clothing are exempt from sales tax, and property taxes can be partially offset by Minnesota's property tax refund program. Compared to Florida, Texas, or Tennessee, Minnesota's tax burden on retirees is substantially higher.

How does Minnesota's 9.85% top rate compare to other states?

Minnesota's 9.85% top rate is among the highest in the US — lower than California (13.3%), Hawaii (11%), New York (10.9%), and New Jersey (10.75%), and similar to Oregon (9.9%). In the Midwest, Minnesota's top rate is the highest by a significant margin: Wisconsin tops at 7.65%, Iowa at 3.8% (flat), and neighboring South Dakota has no income tax at all.

Does Minnesota have a local income tax?

No — Minnesota does not allow cities or counties to levy local income taxes. The 9.85% top rate is purely a state tax. This is a contrast to Ohio, Michigan, and Maryland where localities add substantial income taxes on top of state rates.

What income is exempt from Minnesota income tax?

Minnesota exempts: federal bond interest, railroad retirement benefits, and qualifying Social Security income (AGI up to $86,410 single, 2026). Groceries and clothing are exempt from sales tax. Public pension income (MSRS, PERA, TRA) is generally taxable in Minnesota, though a limited public pension subtraction (up to $13,850 single / $27,690 MFJ for 2026, phased out at higher AGI) may apply.

What is Minnesota's standard deduction for married filing jointly in 2026?

Minnesota's 2026 standard deduction for married filing jointly is $30,600 — exactly double the $15,300 single-filer amount. A couple earning $100,000 gross has taxable income of roughly $69,400 after the deduction and owes approximately $4,013 in Minnesota tax, an effective rate of about 4.01%.

How does Minnesota tax remote workers?

Minnesota residents owe Minnesota income tax on all income regardless of where work is performed. Remote workers living in Minnesota pay Minnesota rates on all earnings. Non-residents only owe Minnesota tax on income earned within Minnesota. If you're considering relocating from Minnesota to a no-income-tax state, establishing genuine domicile in the new state is required before Minnesota stops taxing your income.
Disclaimer:This guide is for educational purposes only and does not constitute tax or financial advice. Minnesota income tax brackets and thresholds are adjusted annually for inflation. Rates shown reflect 2026 tax year estimates based on official Minnesota Department of Revenue data. Consult a qualified tax professional for advice specific to your situation.
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