Minnesota does not tax Social Security benefits

Minnesota is one of 13 states that does not tax Social Security income at all. If you receive Social Security retirement, survivor, or disability benefits, you will not owe Minnesota state income tax on those payments, regardless of how much you receive or what other income you have.

This is different from federal income tax. The federal government may tax your Social Security benefits depending on your total income, but Minnesota adds no state tax on top of that. The distinction matters because some states tax Social Security while others do not, and the rules vary widely.

Key Takeaways

  • Minnesota does not tax Social Security retirement, survivor, or disability benefits under state law.
  • Federal income tax may still explore to your Social Security benefits if your combined income exceeds certain thresholds, even though Minnesota does not tax them.
  • You do not need to report Social Security income separately on your Minnesota state tax return.
  • If you moved to Minnesota from another state, check whether your previous state taxed Social Security, as you may have overpaid in prior years.

How federal taxation of Social Security works

Even though Minnesota does not tax Social Security, the federal government may. Whether your benefits are taxed federally depends on your combined income, which includes your adjusted gross income, nontaxable interest, and half of your Social Security benefits.

If your combined income is below $25,000 (single filer) or $32,000 (married filing jointly), you owe no federal tax on your Social Security. If it exceeds those thresholds, up to 50 percent or 85 percent of your benefits may be taxable, depending on how far over the limit you are. This calculation is complex, and the IRS worksheet in Publication 915 walks through it step by step.

Minnesota's decision not to tax Social Security does not change this federal calculation. You still report Social Security income on your federal return (Form 1040) if any portion is taxable, but you do not report it on your Minnesota return.

What counts as combined income for federal purposes

Combined income includes wages, self-employment income, interest, dividends, capital gains, pensions, and distributions from retirement accounts. It also includes half of your Social Security benefits themselves. Certain types of income, like municipal bond interest, do not count toward the combined income threshold.

If you are married and file jointly, your spouse's income counts too, even if only one of you receives Social Security. This is why a spouse with significant pension or investment income can push a household over the federal threshold and trigger taxation of benefits, even if the Social Security recipient alone would have stayed below it.

Reporting Social Security on your Minnesota tax return

You do not report Social Security income on your Minnesota Form M1 (the state income tax return). Leave those lines blank. Minnesota's tax forms do not include a line for Social Security because the state does not tax it.

If you received a Form SSA-1099 from Social Security showing your benefits, keep it for your records and use it to calculate your federal tax liability, but do not transfer that amount to your state return. Some tax software automatically skips the Social Security section when you select Minnesota as your state, but double-check your return to make sure no Social Security income appears on the state portion.

Moving to Minnesota from a state that taxes Social Security

If you moved to Minnesota from a state that taxes Social Security—such as Colorado, Connecticut, Kansas, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, Vermont, or West Virginia—you may have paid state tax on benefits in previous years. Those taxes are not refundable under Minnesota law, but you should verify your residency status in your former state for the year you moved.

Some states tax Social Security only for residents, so if you moved partway through a tax year, you may have owed tax to your former state for only the months you lived there. Check your former state's rules and your own filing history to understand what you paid and whether any adjustment is possible.

Other Minnesota tax considerations for retirees

While Minnesota does not tax Social Security, it does tax other retirement income. Distributions from traditional IRAs, 401(k)s, and pensions are taxable at the Minnesota state rate. Minnesota also taxes interest and dividends, though it offers a small deduction for certain types of retirement income if you meet age and income requirements.

If you are over 65, Minnesota allows a property tax refund for homeowners and renters with low to moderate income. This is separate from income tax but may reduce your overall tax burden. The Minnesota Department of Revenue administers this program, and you can find details on its website.

Frequently Asked Questions

Do I have to file a Minnesota tax return if I only receive Social Security?

No. If Social Security is your only income and you have no other earnings, you generally do not need to file a Minnesota state return. However, if you have other income—wages, pensions, interest, or dividends—you may need to file even though Social Security itself is not taxed.

If I move out of Minnesota, will I owe back taxes on Social Security?

No. Minnesota does not tax Social Security, so there is nothing to owe. However, if you move to a state that does tax Social Security, you may owe tax to that state starting the year you become a resident there. Check your new state's rules.

Will my federal Social Security tax change because I live in Minnesota?

No. Federal taxation of Social Security is the same in every state and depends only on your combined income, not on where you live. Minnesota's decision not to tax Social Security does not affect your federal calculation.

Can I deduct Social Security taxes I paid while working?

No. Social Security payroll taxes (the 6.2 percent withheld from your wages) are not deductible on any tax return, federal or state. Once you begin receiving benefits, those taxes are not refunded or credited.

What if I received Social Security benefits while living in another state and now live in Minnesota?

You owe Minnesota no tax on those past benefits. If your former state taxed Social Security, those taxes were owed to that state in the years you lived there. Moving to Minnesota does not change what you owed in the past, but it means you will not owe Minnesota tax on Social Security going forward.