Minnesota has a progressive state income tax with rates ranging from 5.35% to 9.85%, making it one of the highest state income tax rates in the nation. The top rate applies to income over $193,240 for single filers.
Minnesota Tax Brackets (2026)
| Taxable Income (Single) | Tax Rate |
|---|---|
| $0 - $31,690 | 5.35% |
| $31,690 - $104,090 | 6.8% |
| $104,090 - $193,240 | 7.85% |
| $193,240+ | 9.85% |
Minnesota's top rate of 9.85% is among the highest in the nation—only California and a few other states have higher rates. These figures are based on Minnesota Department of Revenue guidelines.
What You'll See on Your Paystub
A Minnesota worker's paystub includes both federal income tax withholding and state deductions:
| Deduction | Rate | Notes |
|---|---|---|
| Federal Income Tax | Varies | Based on W-4 and income |
| Social Security | 6.2% | Up to $181,200 wage base |
| Medicare | 1.45% | No wage limit |
| Minnesota State Income Tax | 5.35% - 9.85% | Based on income level |
Minnesota Standard Deduction
Minnesota's standard deduction is tied to the federal amounts:
| Filing Status | Standard Deduction (2026) |
|---|---|
| Single | $15,420 |
| Married Filing Jointly | $30,840 |
| Head of Household | $23,130 |
Paid Family & Medical Leave
Minnesota's Paid Leave program launched in 2026:
- Total rate: 0.88% of wages
- Employee portion: 0.44%
- Employer portion: 0.44%
- Wage cap: Social Security wage base ($181,200 in 2026)
The Paid Leave deduction appears on your paystub as a separate line item starting in 2026.
No Local Income Taxes
Minnesota does not allow cities or counties to impose local income taxes. Your state withholding covers all Minnesota income tax obligations.
Reciprocity Agreements
Minnesota has income tax reciprocity with neighboring states:
- Michigan: Minnesota residents working in Michigan pay only Minnesota tax
- North Dakota: Minnesota residents working in North Dakota pay only Minnesota tax
If you live in Minnesota but work in Michigan or North Dakota, you only need to file a Minnesota tax return and pay Minnesota taxes.
Twin Cities Metro
Special considerations for Minneapolis-St. Paul workers:
- High concentration of Fortune 500 companies
- Strong job market with competitive wages
- Higher wages help offset the high tax rate
- Many employers headquartered in Minnesota
Minnesota vs. Neighboring States
| State | Tax Structure | Top Rate |
|---|---|---|
| Minnesota | Progressive | 9.85% |
| South Dakota | None | 0% |
| North Dakota | Progressive | 2.5% |
| Wisconsin | Progressive | 7.65% |
| Iowa | Flat | 3.8% |
Retirement Income
Minnesota taxes most retirement income:
- Social Security is partially taxable (subtraction available for lower incomes)
- Pension income is generally fully taxable
- 401(k) and IRA distributions are taxable
- Military retirement pay is taxable
Minnesota offers a Social Security subtraction for single filers with federal AGI under $82,770 and joint filers under $105,380.
Comparing Take-Home Pay
Here's how a $75,000 annual salary in Minnesota compares to other states:
| State | Effective Rate | Annual State Tax |
|---|---|---|
| Minnesota | ~5.5% | ~$3,600 |
| Wisconsin | ~4.6% | ~$3,100 |
| South Dakota | 0% | $0 |
High Earner Considerations
If you earn over $193,240 (single) or $304,970 (married filing jointly):
- You'll pay the top 9.85% rate on income above those thresholds
- Combined with federal taxes, marginal rates can exceed 47%
- Consider tax planning strategies like maximizing retirement contributions
- Stock options and bonuses may push you into higher brackets