State & Local Taxes

Minnesota State Income Tax: 2026 Rates and Brackets

By The Ledgerism Editorial Team · The Ledgerism Brief Editorial Team produces original, methodology-disclosed accounting and tax research—data trackers, databases, and reference guides built to be the most-cited source in the field. Every figure is verified against primary sources including FASB, the IRS, the PCAOB, NASBA, the AICPA, and state boards of accountancy.

Minnesota state income tax uses four progressive rates for tax year 2026: 5.35%, 6.80%, 7.85%, and 9.85%. A single filer pays 5.35% on the first $33,310 of taxable income and reaches the top 9.85% rate only on income above $203,150. Minnesota is one of the higher-tax states, with a top rate that ranks among the steepest in the country, and it layers a separate 1% net investment income tax on very large investment gains.

The rates below apply to Minnesota taxable income, which starts from your federal taxable income and then adds and subtracts specific Minnesota items. The state adjusts its bracket thresholds each year for inflation using the Chained CPI, so the 2026 figures shifted up 2.369% from 2025.

Minnesota income tax rates and brackets for 2026

Minnesota applies four rates, and each rate hits only the slice of taxable income inside its band. The 9.85% top rate is marginal, not a flat charge on your whole income. The table below shows the 2026 brackets by filing status.

Because the structure is marginal, your effective rate (total tax divided by total income) sits well below your top bracket rate for most filers. A single filer with $120,000 of taxable income, for example, pays the top of that amount at 7.85% but the earlier dollars at 5.35% and 6.80%, so the blended rate lands closer to the middle of the schedule. The difference between the two figures matters when you plan withholding or estimated payments.

Minnesota standard deduction and exemptions for 2026

Minnesota offers its own standard deduction that largely tracks the federal amount, plus a per-dependent exemption. For 2026 the standard deduction is $15,300 for single and married-filing-separately filers, $30,600 for married filing jointly, and $23,000 for head of household. The dependent exemption is $5,300 per qualifying dependent.

You can take the Minnesota standard deduction or itemize, and the choice is independent of what you claimed federally in some cases. Minnesota itemized deductions follow a modified version of the federal Schedule A rules, so taxpayers with large mortgage interest, charitable gifts, or state and local taxes should run both methods.

High earners should note that Minnesota reduces both the standard deduction and itemized deductions once income climbs past a statutory threshold. The limitation can shrink these benefits by a set percentage of income above the threshold, which means the deductions may be worth less than the headline number for top-bracket filers. The exact phaseout depends on your filing status and income for the year.

The Minnesota net investment income tax (1% surtax)

Starting with tax year 2024, Minnesota imposes a 1% net investment income tax on investment income above $1 million. It applies to individuals, estates, and trusts, and the $1 million threshold is the same for every filing status, including married couples filing jointly. This state surtax is separate from the federal 3.8% Net Investment Income Tax and stacks on top of it.

Net investment income for this tax generally includes interest, dividends, capital gains (short-term and long-term), rents, royalties, and similar passive income. The amount can be reduced by related deductions such as investment interest expense and investment advisory or brokerage fees.

Only the portion above $1 million is taxed. A taxpayer with $1.4 million of net investment income would owe the 1% surtax on $400,000, or about $4,000, on top of the regular Minnesota income tax on that income. Because the threshold does not double for joint filers, married couples with concentrated investment income can reach it faster than they might expect. See our explainer on the federal Net Investment Income Tax (NIIT) for how the two layers interact.

Social Security and retirement income in Minnesota

Minnesota taxes Social Security benefits, but a subtraction can remove some or all of the taxable amount depending on income. For 2026, filers below an adjusted gross income threshold can subtract 100% of their federally taxable Social Security: below $110,780 for married filing jointly, $86,410 for single or head of household, and $55,390 for married filing separately.

Above those levels the subtraction phases out by 10% for each $4,000 of AGI over the threshold, so it disappears entirely once income exceeds roughly $150,780 (joint), $126,410 (single or head of household), or $75,390 (married filing separately). Filers can use either a simplified method based on AGI or an alternative method based on provisional income, and may choose whichever produces the larger subtraction.

Other retirement income, such as pension and IRA distributions, is generally taxable in Minnesota at the ordinary rates above, though separate subtractions may apply in specific situations. Retirees planning a move should weigh this against states with no income tax; our guide to states with no income tax covers the trade-offs.

Who pays Minnesota income tax: residency rules

Minnesota taxes residents on all income and nonresidents on income sourced to the state. You are generally a full-year resident if Minnesota is your domicile, meaning your permanent home and the place you intend to return to. Domicile turns on facts such as where you vote, register vehicles, keep your primary home, and locate your family and finances.

Minnesota also applies a statutory residency test. A person who is not domiciled in the state can still be taxed as a resident if they maintain an abode in Minnesota and spend at least 183 days of the year in the state. Days are counted broadly, so part-year moves and frequent travel back to Minnesota can trigger residency even without formal domicile.

Part-year residents and nonresidents file Schedule M1NR to apportion income between Minnesota and other states. If you paid tax to another state on the same income, a credit for taxes paid to other states can prevent most double taxation, subject to limits. The interaction of state rules is covered in state vs federal income tax.

How Minnesota income tax compares

Minnesota’s 9.85% top rate is among the highest state income tax rates in the nation, though it applies only to income above roughly $203,000 for single filers. The bottom 5.35% rate is also relatively high compared with the entry rates in many states, which means even middle-income filers face meaningful state tax. The gap between your marginal and effective rate is explained in marginal vs effective tax rate.

For comparison, high-tax peer states structure their brackets differently. California reaches a higher top rate but starts far lower, while Minnesota’s flatter four-bracket schedule pushes more income into its upper rates sooner.

Frequently asked questions

What is the Minnesota income tax rate for 2026?

Minnesota has four rates for 2026: 5.35%, 6.80%, 7.85%, and 9.85%. The rates are marginal, so each applies only to income within its bracket. A single filer pays 5.35% up to $33,310 and does not reach the 9.85% rate until taxable income exceeds $203,150. Married joint filers hit the top rate above $337,930.

Does Minnesota tax Social Security benefits?

Minnesota can tax Social Security, but many filers subtract all of it. For 2026, joint filers with AGI below $110,780 (or $86,410 for single filers) may subtract 100% of federally taxable benefits. Above those thresholds the subtraction phases out by 10% for every $4,000 of additional AGI and reaches zero at higher income levels.

What is the Minnesota net investment income tax?

It is a 1% state surtax on net investment income above $1 million, effective for tax years starting in 2024. It applies to individuals, estates, and trusts, and the $1 million threshold is the same for all filing statuses. Only income above $1 million is taxed, and it stacks on top of the federal 3.8% NIIT and regular Minnesota income tax.

What is the Minnesota standard deduction for 2026?

The 2026 standard deduction is $15,300 for single and married-filing-separately filers, $30,600 for married filing jointly, and $23,000 for head of household. The dependent exemption is $5,300 each. Minnesota may reduce these amounts for high-income filers under a statutory limitation, so top-bracket taxpayers should confirm the reduced figure for their income.

How does Minnesota decide if I am a resident?

You are generally a Minnesota resident if the state is your domicile, your permanent home. Minnesota also uses a 183-day statutory test: if you keep an abode in the state and spend at least 183 days there in a year, you may be taxed as a resident even without domicile. Part-year residents and nonresidents apportion income on Schedule M1NR.

Is Minnesota income tax higher than the federal rate?

They are separate taxes and cannot be added into one bracket. Minnesota’s top state rate is 9.85%, while the top federal rate is 37%. You may owe both on the same income, though a portion of state tax can offset federal liability if you itemize. Your combined burden depends on income, deductions, and filing status.

Reviewed by The Ledgerism Editorial Team. Last reviewed: July 2026.