About Minnesota State Income Tax

Minnesota uses a progressive tax system with four tax brackets. The state has one of the highest top tax rates in the nation at 9.85%, though this only applies to very high earners.

Minnesota Tax Brackets 2026 (Single Filers)

• $0 - $30,070: 5.35%
• $30,071 - $98,760: 6.8%
• $98,761 - $183,340: 7.85%
• Over $183,340: 9.85%

How Minnesota Tax is Calculated

Minnesota's progressive tax system works as follows:

1. Income is divided into four tax brackets
2. Each bracket is taxed at its corresponding rate
3. Standard deduction and personal exemptions reduce taxable income
4. Various credits may be available

Minnesota Tax Features

• High Top Rate: 9.85% is among the highest in the US
• Progressive System: Lower earners pay significantly less
• Social Security Exempt: No tax on Social Security benefits
• Working Family Credit: Helps low and moderate-income families

Frequently Asked Questions

What is Minnesota's income tax rate?

Minnesota has progressive tax rates from 5.35% to 9.85%. The top rate of 9.85% only applies to income over $183,340 for single filers and $304,970 for married couples filing jointly.

Why are Minnesota taxes so high?

Minnesota's higher taxes fund extensive state services including excellent schools, healthcare programs, infrastructure, and social services. The state consistently ranks high in quality of life metrics.

Does Minnesota tax Social Security?

No, Minnesota does not tax Social Security retirement benefits, which helps offset the higher income tax rates for retirees.

How does Minnesota compare to neighboring states?

Minnesota (9.85% top rate) is higher than all neighbors: Wisconsin (7.65%), Iowa (being reduced), South Dakota (0%), North Dakota (2.9%), and Michigan (4.25%). Minnesota has the highest rates in the region.

Minnesota vs. Neighboring States

Tax comparison with surrounding states:

• Wisconsin: Progressive up to 7.65%
• Iowa: Progressive (being reduced to 3.9%)
• South Dakota: No state income tax
• North Dakota: Progressive up to 2.9%

What Minnesota Taxes Fund

Minnesota's higher taxes provide:

• Top-Rated Schools: Consistently ranked among best in the nation
• Healthcare Access: Extensive health coverage programs
• Infrastructure: Well-maintained roads, bridges, transit
• Quality of Life: High standard of living, low unemployment

Tips for Minnesota Taxpayers

• Understand that high taxes fund high-quality services
• Claim all available credits and deductions
• Social Security is not taxed - good for retirees
• Working Family Credit helps lower-income households
• Consider Minnesota's overall quality of life vs. tax burden