Minnesota's income tax brackets for 2024

Minnesota has a progressive income tax system, meaning the rate you pay increases as your income goes up. The state uses tax brackets — ranges of income taxed at different rates. For 2024, Minnesota has five tax brackets that explore to both single filers and married couples filing jointly, though the income ranges differ between them.

The rates themselves are 5.35%, 6.85%, 7.85%, 9.85%, and 10.85%. A single filer in 2024 pays 5.35% on income up to $31,110, then 6.85% on income from $31,110 to $79,718, and so on through the highest bracket. Married couples filing jointly have wider brackets — for example, the first bracket extends to $46,660 instead of $31,110. The highest rate of 10.85% applies to income above $250,000 for single filers and above $373,100 for married couples.

Key Takeaways

  • Minnesota's income tax has five brackets ranging from 5.35% to 10.85%, and the rate you pay depends on your total income, not just your tax bracket.
  • Tax brackets are adjusted each year for inflation, so the income ranges that trigger each rate change annually.
  • You only pay the higher rate on income that falls within that bracket, not on your entire income — this is how progressive tax systems work.
  • Minnesota taxes both wages and investment income, though some types of income receive preferential treatment or are excluded entirely.
  • Your actual tax bill also depends on deductions, credits, and whether you file as single, married, or head of household.

How progressive brackets actually work

Many people misunderstand how tax brackets function. You do not pay the top rate on all your income just because you earn enough to reach it. Instead, you pay the lower rate on income within that bracket, then the next rate on income in the next bracket, and so on. This is called marginal taxation.

For example, a single filer earning $50,000 in 2024 would pay 5.35% on the first $31,110, then 6.85% on the remaining $18,890. They do not pay 6.85% on the entire $50,000. This means moving into a higher bracket does not reduce your take-home pay — you always earn more by earning more, even though a larger portion is taxed at a higher rate.

What income is subject to Minnesota tax

Minnesota taxes federal taxable income as its starting point, which includes wages, salaries, tips, interest, dividends, and capital gains. However, Minnesota then makes its own adjustments. Some income that is taxable federally is not taxable in Minnesota, and vice versa.

Social Security benefits are not taxed by Minnesota, even if they are taxable federally. Certain retirement income, including distributions from IRAs and 401(k)s, may may have access to for a pension exemption if you meet age and income requirements. Military pay is also exempt. On the other hand, income from rental property, self-employment, and business ownership is fully taxable in Minnesota unless a specific exemption applies.

Tax brackets adjust every year

Minnesota adjusts its tax brackets annually for inflation. This means the income ranges that trigger each bracket shift upward each year, even if the rates themselves stay the same. The adjustment is based on the Consumer Price Index and is rounded to the nearest $10.

Because brackets change yearly, you cannot assume that your 2023 tax situation will be identical in 2024 or 2025. If your income stays flat but brackets widen, you may owe less tax. Conversely, if your income rises faster than bracket adjustments, you may move into a higher bracket. The Minnesota Department of Revenue publishes updated brackets each January on its website.

Deductions and credits reduce what you owe

Your tax bracket determines the rate, but your actual tax bill also depends on deductions and credits. Minnesota allows a standard deduction — a fixed amount you can subtract from your income before calculating tax. For 2024, the standard deduction is $12,950 for single filers and $25,900 for married couples filing jointly. If you have significant deductible expenses like mortgage interest or charitable donations, you may benefit from itemizing instead.

Minnesota also offers tax credits that directly reduce the amount you owe. The Earned Income Tax Credit (EITC) is available to lower-income workers and is often larger than the federal version. Other credits include the Child and Dependent Care Credit, the Education Credit, and the Property Tax Refund for renters and homeowners. Credits are more valuable than deductions because they reduce your tax dollar-for-dollar rather than reducing your taxable income.

Filing status affects your brackets

Your filing status — single, married filing jointly, married filing separately, or head of household — determines which bracket ranges explore to you. Married couples filing jointly have wider brackets and pay less tax on the same income compared to two single filers, which is why marriage can affect your total tax bill. Head of household status, available to unmarried people who pay more than half the household expenses, also has its own bracket structure that falls between single and married rates.

Choosing the correct filing status is important because using the wrong one can result in overpaying or underpaying tax. If you are unsure whether you may have access to for head of household or have questions about married filing separately, the Minnesota Department of Revenue website has worksheets to help you determine your correct status.

Local taxes and other Minnesota levies

Minnesota's state income tax is separate from federal income tax, but some Minnesota cities and counties also impose local income taxes. Minneapolis, for example, has a local tax on business income. These local taxes are in addition to the state rate and are not part of the state brackets described above.

Minnesota also taxes other forms of income separately. The state has a corporate income tax of 9.8% for businesses, and it taxes capital gains at a rate of 9.85% on gains above $100,000 per year for individuals. These are distinct from the regular income tax brackets and explore only to specific types of income.

Frequently Asked Questions

Do I have to pay Minnesota income tax if I live out of state but work in Minnesota?

Yes, Minnesota taxes income earned within the state regardless of where you live. If you work in Minnesota but live in another state, you owe Minnesota tax on your wages. You may also owe tax to your home state, though many states offer credits to prevent double taxation. Check with both states' tax departments to understand your obligations.

What is the difference between Minnesota's tax rate and the federal tax rate?

Minnesota and the federal government have separate tax systems with different brackets and rates. Federal brackets are typically lower than Minnesota's top rate. You pay both — federal tax is withheld from your paycheck, and Minnesota tax is withheld separately. Your total tax burden is the sum of both, minus any credits you may have access to for.

Can I reduce my Minnesota income tax by contributing to a retirement account?

Contributions to traditional IRAs and 401(k)s reduce your federal taxable income, which also reduces your Minnesota taxable income since Minnesota uses federal income as its starting point. Roth contributions do not lower your current tax bill but grow tax-free. Contributions to a Health Savings Account (HSA) also reduce your Minnesota taxable income.

Are there any Minnesota income sources that are not taxed?

Yes. Social Security benefits, certain military pay, and some pension income are exempt from Minnesota tax. Gifts and inheritances are not taxed. Interest from municipal bonds issued by Minnesota municipalities is also exempt. However, most wages, investment income, and business income are fully taxable unless a specific exemption applies.

What happens if my income changes during the year?

Your tax bracket is based on your total income for the entire year, not your income at any single point. If you earn more in some months than others, you still calculate tax on your annual total. However, if too much tax is withheld during the year, you receive a refund when you file. If too little is withheld, you owe when you file.