Minnesota retirement income tax (2026)

How Minnesota taxes retirement income

Minnesota taxes income in 4 brackets for a married couple filing jointly, from 5.35% to 9.85%; the top rate starts at $337,930 of taxable income^[1]. For the example couple below, the last dollar of taxable income falls in the 6.8% bracket.

Before the rate applies, the simulator subtracts a standard deduction of $30,600 on a joint return ($15,300 single). It applies no personal exemption.

Minnesota is one of 2 states covered here that tax Social Security. The simulator adds the federally taxable part of benefits (up to 85%, from the federal worksheet^[2]) to the Minnesota base: for the example couple that is $40,000 of their $48,000 in benefits. Where state law relieves part of that tax at lower incomes, the notes below say so. The simulator does not apply that relief, so it can overstate the tax.

The simulator applies no retirement-income exclusion in Minnesota: IRA and 401(k) withdrawals and pensions are taxed like other income. Any narrower break in state law that the simulator does not apply is listed under “What this page leaves out”.

Long-term capital gains and qualified dividends are taxed as ordinary income, at the same rates.

For single filers the simulator halves the joint deduction and exemption but keeps the joint bracket widths. Where Minnesota’s real single brackets are narrower, that understates a single filer’s tax.

Put together, the example couple below owes $4,013 in Minnesota, the 22nd lowest of the 24 states covered here that tax income.

2026 brackets

Bracket thresholds are held at these values in every simulated year. The simulator does not index state amounts for inflation.

Worked example

A retired couple, both 67, filing jointly, with $48,000 of Social Security, $40,000 of IRA withdrawals and a $20,000 pension. The figures are computed when the page is built, by the same state-tax function the simulator runs.

The couple’s next $1,000 of IRA withdrawals would add $122 of Minnesota tax.

A single retiree, 67, with half those amounts ($24,000 of Social Security, $20,000 of IRA withdrawals, a $10,000 pension) owes $1,391, 2.58% of gross income, against the couple’s 3.72%.

As IRA withdrawals rise

The same couple, with Social Security and the pension unchanged, taking more from their IRAs (a larger withdrawal, a required minimum distribution or a Roth conversion all count as distributions here):

Neighbouring states

The example couple’s state tax in Minnesota and in the neighbouring states covered here, same income and ages:

Against Minnesota, the couple would pay less in Wisconsin (−$4,013), South Dakota (−$4,013). With $200,000 of IRA withdrawals instead of $40,000, they would owe $15,333 in Minnesota, against Wisconsin ($7,182), South Dakota ($0).

What this page leaves out

What the simulator does and does not handle for Minnesota, item by item^[1]:

• Tax year 2026 married filing jointly brackets (5.35%–9.85%) and $30,600 standard deduction (phase-down ignored).
• Social Security modeled as TAXED: the full subtraction for AGI below $110,780 married filing jointly for 2026 (phasing out 10% per $4,000 above) is not modeled, overstating tax for lower-income retirees.
• No retirement exclusion.
• 1% net-investment surtax over $1M ignored.
• Single/head of household brackets are narrower than the married filing jointly table the simulator reuses (an approximation).

In every state the simulator also leaves out credits, itemized deductions, deductions that phase out with income, local income taxes, surtaxes and any deduction for federal tax paid. It holds state amounts fixed and does not index them for inflation.

See it over a full plan

Related

• All 33 states compared
• State taxes in retirement: the exemptions that change the map
• The Social Security tax torpedo
• The RMD bomb: how pre-tax savings become forced income
• Roth ladder: how a Roth conversion ladder works
• Taxes in retirement: the topic guide
• Marginal-rate map (federal and state tax on the next dollar)