Minnesota Paycheck Calculator & Income Tax Rates (2026)

Minnesota applies 4 rates to taxable income — that is, income after the state standard deduction or exemption. Only the slice of income inside each band is taxed at that band's rate.

Minnesota's effective state rate climbs with income as more of your salary lands in higher bands. The last column shows the state rate on your next dollar at each level.

Minnesota's joint brackets widen the bands for couples, so the same household income is taxed more lightly. On $100,000 a joint return keeps $80,634 versus $73,814 for a single filer.

Minnesota has four graduated brackets — 5.35%, 6.8%, 7.85%, and 9.85% — and the top rate, in place since 2013, is among the five highest of any state. Thresholds are indexed annually, but the 9.85% bracket begins around $200,000 of taxable income for a single filer, far lower than the entry points for California's or New York's top rates. Joint brackets are wider than single brackets but not double, which creates a marriage penalty the state partly offsets with a Marriage Credit. On top of the rate schedule, a 2023 law added a 1% net investment income tax on investment income above $1 million, and Minnesota remains one of the few states that still tax Social Security benefits, though a 2023 expansion exempts most middle-income retirees. The same 2023 law created the nation's largest state child tax credit. The result is a system that leans hard on high earners and returns a lot to families with children.

Minnesota sets its own standard deduction, roughly $15,000 single and $30,000 joint, indexed, plus a dependent exemption of about $5,200 (there is no personal exemption for the taxpayer). Itemizing is allowed regardless of federal choice, but both deductions phase down above roughly $240,000 of income and are cut sharply above $1 million. Credits are generous: a refundable $1,750-per-child Child Tax Credit, the Working Family Credit, a K-12 education credit, a Marriage Credit, and a $500 student loan credit.

No Minnesota city, county, or school district levies an income tax; local governments rely on property taxes, local sales taxes, and state aid. Minneapolis and St. Paul take nothing from paychecks beyond the state rate. Minnesota has reciprocity only with Michigan and North Dakota — the Wisconsin agreement ended after 2009, so Hudson and River Falls commuters file in both states and claim a credit.

The state sales tax is 6.875%, and local taxes stack on top: Hennepin and Ramsey county taxes, city taxes in Minneapolis and St. Paul, and a 1% seven-county metro tax added in October 2023 for transit and housing push combined rates above 9% in the Twin Cities. Minnesota exempts groceries, prescription drugs, and — unusually — clothing, one of only a few states to do so. Prepared food, liquor, and lodging carry additional local taxes in Minneapolis and St. Paul.

Property taxes are near the national average, around 1.05–1.1% of market value. The Homestead Market Value Exclusion reduces the taxable value of owner-occupied homes worth up to about $517,000, most generously for modest homes. Two refund programs matter: the Homestead Credit Refund, a circuit breaker for homeowners whose taxes are high relative to income, and a Renter's Credit now claimed on the income tax return. Seniors with household income under $96,000 can defer property taxes above 3% of income.

Minnesota taxes Social Security, but a subtraction exempts most retirees: benefits are fully subtracted for federal AGI up to roughly $110,000 (joint) or $86,000 (single) for 2026, phasing out by 10% for every $4,000 above those lines. Pensions, 401(k) and 403(b) withdrawals, and traditional IRA distributions are taxed as ordinary income at the full graduated rates — there is no general pension exclusion. Military retirement pay is fully subtractable (or creditable instead). Retirees with public pensions from jobs not covered by Social Security — teachers, police, firefighters — can subtract up to $12,500 ($25,000 joint), subject to income limits. For a retiree living on a large private pension, Minnesota is among the region's least favorable states.

High earners lose: 9.85% from around $200,000 up, plus 1% on investment income over $1 million, makes Minnesota the most expensive income-tax state between the coasts for a $500,000 household. Dual-income professional couples carry a marriage penalty only partly offset by the Marriage Credit. Families with children at low and middle incomes win — the $1,750-per-child credit is the largest in the country. Retirees on large private pensions do poorly; retirees under the Social Security thresholds do fine. Remote workers owe Minnesota on everything. Self-employed Minnesotans pay the same graduated rates on net profit, with no local tax.

The median household income in Minnesota is $68,000, which is $53,478 a year ($4,456 a month) after all taxes. That is close to the national median. After adjusting for cost of living, the purchasing power of that take-home is equivalent to $54,018 in an average-cost area.

Minnesota ranks #45 of 50 for raw take-home pay and #34 for cost-adjusted purchasing power at $100,000. The 11-place gap between the two reflects a below-average cost of living that boosts real purchasing power. The best state (Alaska) leaves $79,125; the worst (Oregon) leaves $70,932. Minnesota is $5,311 behind the leader.

Minnesota Tax Questions, Answered

Compare Minnesota with Other Midwest States

Specific Salaries in Minnesota