Minnesota's income tax starts higher than almost any other state's. The first dollar of taxable income is taxed at 5.35% — a rate several states never reach at any income, and one that applies from the moment you clear the standard deduction.
From there it climbs through three more brackets to 9.85%, the fourth-highest top rate in the country.
On $85,000 a single filer pays $4,257 and takes home $64,371.
A note before you start. This is general education, not tax advice. Federal figures are tax year 2026, from IRS Revenue Procedure 2025-32 and the Social Security Administration; Minnesota's brackets, deduction, Social Security thresholds and retirement rules come from this site's own sourced 50-state dataset, citing Minn. Stat. chapter 290 and the Department of Revenue's Form M1 and Schedule M1M instructions. Every dollar figure is computed by the same engine the site's calculators use, on a single filer taking the standard deduction with no dependents or pre-tax deferrals unless stated. Sales tax and property tax are discussed qualitatively.
1. What Minnesota takes
| Amount on $85,000 | |
|---|---|
| Gross salary | $85,000 |
| Federal income tax | −$9,870 |
| Social Security (6.2%) | −$5,270 |
| Medicare (1.45%) | −$1,233 |
| Minnesota income tax | −$4,257 |
| Take-home | $64,371 |
Across incomes, single filer:
| Salary | Minnesota tax | Effective MN rate | Take-home |
|---|---|---|---|
| $30,000 | $786 | 2.62% | $24,499 |
| $45,000 | $1,589 | 3.53% | $36,749 |
| $60,000 | $2,557 | 4.26% | $47,833 |
| $85,000 | $4,257 | 5.01% | $64,371 |
| $120,000 | $6,637 | 5.53% | $86,613 |
| $175,000 | $10,904 | 6.23% | $119,975 |
The effective rate climbs steadily, which is what four genuinely separated brackets produce — unlike Massachusetts or Illinois, where the effective rate barely moves.
Minnesota takes more than any state except Delaware, Hawaii and Oregon at $85,000.
Run your own salary against Minnesota's brackets2. The brackets
| Taxable income above (single) | Rate |
|---|---|
| $0 | 5.35% |
| $33,310 | 6.80% |
| $109,430 | 7.85% |
| (top threshold) | 9.85% |
Married-joint thresholds are wider but not exactly double — the 6.8% bracket begins at $48,700 for a couple against $33,310 single, which is 1.46×, not 2×. Head of household sits at $41,010 and married-separate at $24,350.
That partial widening is unusual and it matters. In most graduated states the joint thresholds are exactly double the single ones, so a one-earner couple gets the full benefit of the wider brackets. Minnesota gives them less than that, which is why its joint benefit is smaller than the schedule alone would suggest.
For a single filer on $85,000: $15,300 sheltered, $69,700 taxable, $33,310 of it at 5.35% and $36,390 at 6.80% — $1,782 plus $2,475, or $4,257.
The 5.35% opening rate is the thing to notice. Most graduated states start low — Hawaii at 1.4%, Vermont at 3.35%, New York at 3.9%, Virginia at 2%. Minnesota starts above 5%, which means there is no cheap slice at the bottom to bring the average down.
3. Filing jointly
| Salary | Single MN tax | Joint MN tax | Difference |
|---|---|---|---|
| $30,000 | $786 | $0 | $786 |
| $45,000 | $1,589 | $770 | $819 |
| $60,000 | $2,557 | $1,573 | $984 |
| $85,000 | $4,257 | $2,993 | $1,264 |
| $120,000 | $6,637 | $5,373 | $1,264 |
| $175,000 | $10,904 | $9,113 | $1,791 |
The joint benefit grows to $1,264 at $85,000 and holds there before growing again, and the plateau is the partial bracket widening in section 2 showing through: the couple runs out of extra 5.35% band before the single filer runs out of income.
At $30,000 a couple owes Minnesota nothing, since $30,000 falls below the $30,600 joint standard deduction.
$1,264 is a large joint benefit by national standards — Massachusetts's is $220, Illinois's $145, Georgia's $748 — and it is what a genuinely graduated schedule buys.
4. The 1% net investment income tax
Minnesota levies a separate 1% tax on net investment income above a threshold, under Minn. Stat. 290.033. It sits on top of the ordinary rates rather than replacing them.
Two things follow:
Minnesota's top marginal rate on investment income is effectively 10.85%, not 9.85% — 9.85% ordinary plus the 1% surcharge, for someone above both thresholds.
It is a state-level analogue of the federal net investment income tax, and someone above both faces two separate surcharges on the same dollars.
Capital gains get no preferential treatment either. Because Minnesota taxable income begins from federal AGI, capital gains and qualified dividends are fully included and taxed at the ordinary 5.35% to 9.85% rates. The federal preference for long-term gains does not carry over, so a Minnesotan realising a large long-term gain pays a much higher state rate on it than a Montanan or an Arkansan would.
For someone with a substantial taxable portfolio, that combination — ordinary rates plus a 1% surcharge — makes Minnesota one of the more expensive states to hold investments in.
5. What the paycheck actually looks like
On $85,000 as a single filer:
| Pay schedule | Gross per cheque | Net per cheque |
|---|---|---|
| Weekly (52) | $1,634.62 | $1,237.90 |
| Biweekly (26) | $3,269.23 | $2,475.80 |
| Semi-monthly (24) | $3,541.67 | $2,682.12 |
| Monthly (12) | $7,083.33 | $5,364.24 |
Biweekly and semi-monthly are not the same thing. Biweekly is 26 cheques — every other Friday — so two months a year carry three paydays. Semi-monthly is 24, on fixed dates, so every month carries exactly two. The annual total is identical; the monthly cash flow is not, and a biweekly earner budgeting on "two cheques a month" is under-counting by $4,952 a year.
Form W-4MN is Minnesota's own withholding allowance certificate, and Minnesota requires it in more circumstances than most states — a federal W-4 alone does not always suffice. Because Minnesota's rates are high and its brackets genuinely separated, getting the W-4MN wrong costs more here than in a flat-rate state.
Withholding is an estimate, not the tax. Over-withholding produces a refund; under-withholding a bill.
6. No local income tax, barred by statute
Minnesota has no local personal income tax, and local governments are affirmatively prohibited from imposing one.
Minn. Stat. 477A.016, in full: "No county, city, town or other taxing authority shall increase a present tax or impose a new tax on sales or income."
That single sentence bars both a local income tax and a local sales tax increase, which is why Minnesota's local sales tax landscape looks the way it does — individual local option taxes exist only where the legislature has specifically authorised them.
A Minnesota take-home figure needs no local asterisk, and it is barred rather than merely absent — a stronger answer than most states can give, and worth stating because Iowa next door has school district surtaxes and Wisconsin's structure differs again.
7. Social Security: one of the eight, with a real subtraction
Minnesota is one of only eight states that still tax Social Security benefits in 2026 — but a subtraction under Minn. Stat. 290.0132 subd. 26 removes most or all of the benefit below the thresholds.
| Filing status | Threshold (federal AGI) |
|---|---|
| Single / head of household | $86,410 |
| Married filing jointly | $110,780 |
| Married filing separately | $55,390 |
The measure is FEDERAL AGI — specifically the figure on line 1 of Form M1 — not Minnesota AGI and not provisional income. That distinction matters because those three quantities differ, and comparing your number to the wrong one gives the wrong answer.
The subtraction phases out rather than cliffing, which is a better design than Connecticut's or New Mexico's thresholds and means a dollar over the line does not cost a disproportionate amount.
Below $86,410 of federal AGI, most or all of a single retiree's Social Security escapes Minnesota tax. Above it, the subtraction tapers.
8. The rest of retirement
Private pensions are fully taxable.
Public pensions get a partial exclusion of $13,850 per person ($27,690 married filing jointly), which is meaningful but capped.
Military pensions are fully exempt and uncapped, under Minn. Stat. 290.0132 subd. 21 — covering active-component retired pay, reserve-component pay, and Survivor Benefit Plan payments. One caveat: a filer claiming that exemption may not also claim the nonrefundable credit for past military service. It is one or the other.
401(k), 403(b) and traditional IRA distributions are fully taxable as ordinary income. That was confirmed by absence from the Schedule M1M subtraction list and from the enumerated subtractions in Minn. Stat. 290.0132 — there is no general Minnesota retirement-income exclusion and no age-based one.
| Source | Minnesota treatment |
|---|---|
| Social Security | Subtraction below the AGI threshold, tapering above |
| Military retirement | Exempt, uncapped |
| Public pension | $13,850 per person exclusion |
| Private pension | Fully taxed |
| 401(k), 403(b), traditional IRA | Fully taxed |
| Retirement income, single | Minnesota tax |
|---|---|
| $40,000 all Social Security, AGI under $86,410 | Near $0 |
| $40,000 all 401(k) withdrawals | About $1,321 |
| $70,000 — $30,000 SS + $40,000 401(k) | About $1,321 |
Minnesota is not a strong retirement tax state for a private-sector saver, and it is worth saying plainly. A retiree drawing on a 401(k) faces rates starting at 5.35% with no exclusion of any kind.
Compare the region: Illinois exempts 401(k) money entirely, Iowa and Michigan have their own retirement exclusions, and South Dakota takes nothing at all. Minnesota's retirees have unusually cheap alternatives within a short drive, which is a real part of why the state's retirement migration runs the way it does.
9. Minnesota Secure Choice
Minnesota runs an auto-IRA mandate, live with the employer requirement phasing in. Employers with five or more employees that do not offer a qualifying retirement plan must enrol staff in Minnesota Secure Choice, at a 5% default deferral, with a penalty of $100 per employee for non-compliance.
For an employee: you are enrolled by default and may opt out. It is a Roth IRA, so contributions are after tax and do not reduce your Minnesota or federal taxable income — the figures in this article are unaffected. IRA contribution and income limits apply.
5% of $85,000 is $4,250 a year leaving your paycheck without you doing anything.
And a Minnesota-specific consideration on the Roth question. Because Minnesota taxes 401(k) and IRA distributions in full at rates starting at 5.35%, a Roth's advantage is larger here than in a state that exempts retirement income. Someone who will retire in Minnesota gets more from paying tax now at a known rate than from deferring into a system that taxes withdrawals at 5.35% and up. Someone who will retire in Florida, Texas or Illinois gets the opposite answer.
10. What Minnesota charges besides income tax
Sales tax sits above the national middle on combined state and local rates, with local option taxes layered on top in the Twin Cities metro and a number of individual cities.
Groceries are exempt, and so is clothing — Minnesota is one of only a handful of states that exempts clothing from sales tax entirely. That is a genuine and unusual saving, and it partly offsets the rate.
Prescription drugs are exempt as well. The combination of exempt food, clothing and medicine means Minnesota's sales tax base is narrower than its rate suggests, which cuts the other way from South Dakota's very broad base next door.
Property tax is around the national middle by effective rate, with a homestead credit refund — Minnesota's "circuit breaker" — that refunds part of the bill for households whose property tax is large relative to income. It is claimed on a separate return (Form M1PR) rather than automatically, and it is one of the more commonly missed items in the state.
Taken together: a heavy income tax, a moderate sales tax on a narrow base, and a moderate property tax with a real relief programme. Minnesota's overall burden is high, and its income tax is the largest single reason.
The honest comparison for anyone weighing a move is not Minnesota's rate against another state's rate. It is Minnesota's total against theirs — and against South Dakota, which has no income tax but a very broad sales tax and higher property tax, the gap is smaller than $4,257 at $85,000 but still real.
11. Where Minnesota ranks
At $85,000, Minnesota's $4,257 is thirty-eighth of the 41 income-tax states — fourth-highest.
| State | Tax on $85,000 | Take-home |
|---|---|---|
| Oregon | $6,864 | $61,764 |
| Hawaii | $4,656 | $63,971 |
| Delaware | $4,269 | $64,359 |
| Minnesota | $4,257 | $64,371 |
| Maine | $4,128 | $64,499 |
| Virginia | $4,073 | $64,554 |
Against its four neighbours:
| Salary | MN | WI | IA | ND | SD |
|---|---|---|---|---|---|
| $30,000 | $786 | $591 | $488 | $0 | $0 |
| $45,000 | $1,589 | $1,330 | $1,058 | $0 | $0 |
| $85,000 | $4,257 | $3,537 | $2,578 | $377 | $0 |
| $175,000 | $10,904 | $8,634 | $5,998 | $2,132 | $0 |
Minnesota is the most expensive of the five at every income level, and the gaps are large. At $85,000 it takes $1,679 more than Iowa, $3,880 more than North Dakota, and $4,257 more than South Dakota.
The Twin Cities–western Wisconsin corridor makes this concrete. Hudson, River Falls and the St. Croix Valley are a commute from Minneapolis and St. Paul, and the state figure differs by $720 a year at $85,000. Reciprocity between Minnesota and Wisconsin has been on and off historically, so anyone crossing that line for work should check the current arrangement rather than assume.
And Sioux Falls is two hours from the Twin Cities with no income tax at all.
12. What you can control
Pre-tax deferrals save 6.8% at state level for an $85,000 earner — one of the highest state-level deferral savings available anywhere. A $10,000 traditional 401(k) contribution saves $2,200 federally plus $680 in Minnesota tax.
But read section 8. That money is taxed on the way out at 5.35% and up, because Minnesota grants no retirement exclusion. The deferral saves 6.8% now and costs at least 5.35% later if you stay — a real gain, and a much smaller one than the headline suggests.
HSA contributions through payroll cut federal tax, Minnesota tax and FICA. On $4,400 that is roughly $968 federal, $299 Minnesota and $337 FICA — about $1,604, or 36% of the amount contributed.
Investment income is where Minnesota costs the most. Ordinary rates on capital gains plus the 1% net investment income tax in section 4, with no long-term preference. For a household with a large taxable portfolio, that is a bigger Minnesota cost than the wage tax.
And a large realised gain can push federal AGI over the Social Security threshold in section 7, which is a second cost on top of the tax on the gain itself.
Frequently asked questions
What is Minnesota's income tax rate? Four brackets from 5.35% to 9.85%, behind a $15,300 standard deduction for a single filer. The 5.35% opening rate is one of the highest in the country.
What is take-home pay on $85,000 in Minnesota? $64,371 for a single filer taking the standard deduction, after $9,870 federal income tax, $6,503 FICA and $4,257 Minnesota income tax.
Does Minnesota tax capital gains? Yes, as ordinary income at rates up to 9.85%, with no long-term preference — plus a separate 1% net investment income tax above a threshold, making the effective top rate on investment income 10.85%.
Does Minnesota tax Social Security? It is one of eight states that still can, but a subtraction removes most or all of it below $86,410 of federal AGI for a single filer and $110,780 married filing jointly. The subtraction tapers rather than cliffing.
Can a Minnesota city or county tax my income? No. Minn. Stat. 477A.016 states that no county, city, town or other taxing authority shall impose a new tax on sales or income.
Does Minnesota tax my 401(k)? Yes, in full, at every age. There is no general retirement-income exclusion. Military retirement is fully exempt and public pensions get a $13,850 per-person exclusion, but a private-sector 401(k) gets nothing.
How much is the joint filing benefit in Minnesota? $1,264 at $85,000 — large by national standards, though smaller than it would be if Minnesota's joint bracket thresholds were exactly double the single ones. They are not: the 6.8% bracket starts at $48,700 joint against $33,310 single.
How does Minnesota compare with its neighbours? It is the most expensive of the five at every income. At $85,000 it takes $1,679 more than Iowa, $720 more than Wisconsin, $3,880 more than North Dakota, and $4,257 more than South Dakota.
What to do next
Minnesota's schedule starts high and climbs, and its treatment of investment and retirement income is among the least generous in the region. Both are worth planning around rather than discovering.
- Minnesota take-home pay calculator — your salary with every deduction shown separately.
- Your Paycheck in the USA in 2026 — all fifty states on one salary.
- Take-Home Pay in South Dakota — no income tax, two hours away.
- Take-Home Pay in Wisconsin — the neighbour across the St. Croix.
- 50/30/20 budget calculator — built on take-home rather than salary.
Every figure on this site is sourced and dated. How we source every number.
Figures in this article are illustrations computed by this site's own tax engine for tax year 2026, on a single filer taking the standard deduction with no dependents or pre-tax deferrals unless stated. Federal figures come from IRS Revenue Procedure 2025-32 and the Social Security Administration; Minnesota's brackets, deduction, Social Security thresholds, retirement treatment and Secure Choice mandate from this site's sourced 50-state dataset, citing Minn. Stat. chapter 290 and 477A.016 and the Minnesota Department of Revenue. The 1% net investment income tax, sales tax and property tax are discussed qualitatively rather than computed. This is general education and not tax advice; consult a licensed tax professional for your own situation.