Personal income tax
Minnesota collects income taxes from its residents utilizing four tax brackets.
For single taxpayers:
- 5.35 percent on the first $25,070 of taxable income.
- 7.05 percent on taxable income between $25,071 and $82,360.
- 7.85 percent on taxable income between $82,361 and $154,950.
- 9.85 percent on taxable income of $154,951 and above.
For married couples filing jointly:
- 5.35 percent on the first $36,650 of taxable income.
- 7.05 percent on taxable income between $36,651 and $145,620.
- 7.85 percent on taxable income of between $145,621 and $258,260.
- 9.85 percent on taxable income of $258,261 and above.
Residents of Minnesota must file state returns by April 15, or the next business day if that date falls on a weekend or holiday.
A complete list of all Minnesota taxes can be found on Minnesota's Revenue website.
The sales tax in Minnesota is 6.875 percent.
Minnesota's state tax department also administers sales tax for several local governments.The Minnesota Department of Revenue provides an online sales tax rate calculator to determine these rates. The department also issues a fact sheet on special local taxes.
The state also imposes a use tax on items purchased elsewhere but used within Minnesota.
Personal and real property taxes
Each spring, Minnesota property owners get a property tax bill from their county. Three factors that affect the tax bill are the amount the local governments (town, city, county, etc.) spend to provide services to the community, the estimated market value of the property and the classification of the property (how it is used).
Each county property assessor determines the classification (home, apartment, cabin, farm, business) of all property according to its use. Each class of property is then taxed at a different percentage of its value. This percentage, or class rate, is determined by the state legislature.
Minnesota has two property tax refund programs for homeowners: the regular property tax refund and the special property tax refund. Taxpayers may be eligible for one or both, depending on income and the size of the property tax bill.
Inheritance and estate taxes
Minnesota did not adopt the federal tax-law changes related to estate taxation. If the decedent was a Minnesota resident at the time of death, the estate is required to file Form M706 if the federal gross estate exceeds $1.4 million on the date of death in 2014 or if the estate is required to file a federal estate tax return. Estate tax applies for estates larger than $1.6 million for deaths occurring in 2016; $1.8 million in 2017; and $2 million for deaths in 2018 and beyond.
The Form M706 instructions have details on how to determine the federal gross estate and how to calculate the Minnesota estate tax. The Department of Revenue provides online calculators to help taxpayers verify Minnesota estate obligations.
Minnesota does not have an inheritance tax.
Other Minnesota tax facts
Minnesota has income tax reciprocity agreements with Michigan and North Dakota. Workers who live in one of those states are not required to have Minnesota income taxes withheld from their wages.
Individual income tax reciprocity between Minnesota and Wisconsin ended effective Jan. 1, 2010. As a result, Minnesota and Wisconsin residents who work across the border must file returns in both states if they meet minimum filing requirements.
Taxpayers who have trouble resolving a tax issue with the Minnesota Department of Revenue and have exhausted all other administrative remedies should contact the state's Taxpayer Rights Advocate for help.