Minnesota State Income Tax
Minnesota state income tax is a progressive system that levies rates based on your income and filing status.
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Minnesota state income tax 2024 rates are among the highest in the country. They apply to taxable income, which is total income minus deductions and exemptions. Taxable income is also adjusted for inflation, a practice that began in 1979. If you’re a Minnesota resident, you must pay state income tax on the wages you earn in the state. You may also be subject to state tax on certain other sources of income, including capital gains, alimony, and dividends. The state also taxes unemployment insurance (UI) benefits, which are paid to employees who have been laid off or terminated.
Minnesota Income Tax Brackets 2024
| 5.35% Up To | 6.80% | 7.85% | 9.85% Over | |
|---|---|---|---|---|
| Married Joint | $43,950 | $43,951 – $174,610 | $174,611 – $304,970 | $304,970 |
| Married Separate | $21,975 | $21,976 – $87,305 | $87,306 – $152,485 | $152,485 |
| Single | $30,070 | $30,071 – $98,760 | $98,761 – $183,340 | $183,340 |
| Head of Household | $37,010 | $37,011 – $148,730 | $148,731 – $243,720 | $243,720 |
How to File Minnesota State Income Tax?
Minnesotans can file a state income tax return by mail or electronically on Form M1, Individual Income Tax, or through an approved third party. In addition to the aforementioned UI benefit, the state offers a refundable property tax credit and a renter’s credit. State lawmakers recently passed a bill expanding the latter to cover more rental properties. The bill also increased the property tax rebate checks that residents receive in early fall. The money is deposited into the banks of those who provided their banking information on their tax returns.
Like many states, Minnesota requires individuals to file a state income tax return if their gross income meets specific minimums. This is particularly true for those who live in the state part-time or work remotely for a company outside of Minnesota. In addition, people who claim refundable credits or want to get a refund of state taxes they paid must file a Minnesota tax return.
How to Pay Minnesota State Income Tax?
The best way to pay Minnesota state income tax is through direct deposit. The department offers a number of options on its website, and it can even be made from mobile devices. You can also use the department’s e-Services portal to make payments using credit or debit cards, but there are fees associated with these services.
Minnesota State Income Tax Deductions
In Minnesota, your state income tax is based on your taxable income. This means you have to determine your total earnings and then subtract your deductions and exemptions. In general, the state’s deductions track very closely with federal itemized deductions. Minnesota allows standard deductions of $12,900 for single filers and $25,800 for married couples filing jointly. The state has an additional $4,350 exemption per qualifying dependent.
Some residents may be eligible for certain credits and deductions, including the K-12 education expenses credit, the child care credit, the senior citizen property tax reduction and the student loan interest deduction. The state also has one of the country’s lowest unemployment insurance tax rates, and a retirement savings plan is tax-deductible. However, it’s important to understand how these taxes affect your overall financial picture. A financial advisor can help. SmartAsset’s free tool matches you with up to three vetted advisors who serve your area, and you can interview the advisors at no cost before making a decision.
