Understanding Your Minnesota Paycheck
If you call the Land of 10,000 Lakes home, you know that Minnesota offers a high quality of life—but it also comes with a relatively high tax burden. Understanding your Minnesota paycheck is essential for budgeting and financial planning.
Unlike states with a flat tax, Minnesota uses a progressive income tax system with rates ranging from 5.35% to 9.85%. This means high earners contribute a significantly larger percentage of their income to the state. Our updated 2024/2025 calculator helps you estimate your net pay by factoring in these brackets, federal taxes, and FICA deductions.
How to Use This Calculator
- Enter Gross Pay: Input your salary or hourly wages.
- Select Frequency: Choose how often you are paid (Weekly, Bi-Weekly, etc.).
- Filing Status: Choose Single, Married Filing Jointly, etc. This is critical for applying the correct MN tax bracket.
- Allowances: Enter the number of allowances you claim on your W-4MN.
Minnesota Income Tax Brackets (2024)
Minnesota taxes your income based on four brackets. As your income rises, the rate applied to the additional income increases.
Single Filers
- 5.35% on income up to $30,070
- 6.80% on income between $30,071 and $98,760
- 7.85% on income between $98,761 and $183,340
- 9.85% on income over $183,340
Married Filing Jointly
- 5.35% on income up to $43,960
- 6.80% on income between $43,961 and $174,610
- 7.85% on income between $174,611 and $304,970
- 9.85% on income over $304,970
*Note: Brackets are adjusted annually for inflation. Our calculator uses the latest available data.
Reciprocity Agreements: Michigan and North Dakota
Minnesota has tax reciprocity agreements with two states: Michigan and North Dakota.
This means if you live in one of these states but work in Minnesota, you do not have to pay Minnesota income tax on your wages. Instead, you pay income tax to your home state.
Action Required
To take advantage of this, complete Form MWR (Reciprocity Exemption/Affidavit of Residency) and give it to your Minnesota employer. This stops them from withholding MN tax.
Wisconsin Note: Minnesota and Wisconsin do not currently have a reciprocity agreement. If you cross the border for work, you generally must file returns in both states (resident return in home state, non-resident in work state) and claim a credit for taxes paid to avoid double taxation.
Federal Taxes and FICA
Your paycheck is also subject to federal deductions, which apply regardless of where you live.
Federal Income Tax
Calculated based on your W-4 information and the progressive IRS tax brackets (10% to 37%).
FICA Taxes (Social Security & Medicare)
- Social Security: 6.2% of your earnings up to $168,600 (2024 limit).
- Medicare: 1.45% of all earnings. High earners pay an additional 0.9% surtax.
Example Calculation
Let's see how this breaks down for a Single filer in Minneapolis earning $60,000 annually, paid monthly.
| Tax | Amount | Notes |
|---|---|---|
| Federal Income Tax | ~$440 | Estimated based on standard deduction |
| Social Security | $310 | 6.2% flat rate |
| Medicare | $72.50 | 1.45% flat rate |
| MN State Tax | ~$230 | Progressive rates applied |
| Net Monthly Pay | ~$3,947.50 | Take-home amount |
Frequently Asked Questions
Minnesota Working Family Credit (WFC)
Minnesota offers valuable tax relief for working families through the Working Family Credit (WFC). This is a refundable credit, meaning if the credit amount exceeds your tax liability, you get the difference back as a refund.
The WFC is structured similarly to the federal Earned Income Tax Credit (EITC). To qualify, you must have earned income from a job or self-employment and meet income eligibility limits. For 2024, the credit has been expanded, especially for those with younger children.
Child Tax Credit Update
Minnesota introduced a new Child Tax Credit that provides up to $1,750 per child for families earning under specific thresholds. This is one of the most generous state-level child credits in the nation and is fully refundable.
Taxation of Social Security Benefits
For many years, Minnesota was one of the few states that fully taxed Social Security income. However, recent legislative changes have significantly altered this landscape.
Effective for tax year 2024, there is a complete subtraction of Social Security benefits for taxpayers with Adjusted Gross Income (AGI) below $100,000 (for married couples filing jointly) or $78,000 (for single and head of household filers).
For those with income above these thresholds, the subtraction phases out, meaning a portion of benefits may still be taxable. This change represents a major tax cut for thousands of Minnesota retirees.
Maximizing Your Take-Home Pay
You can legally reduce your taxable income by contributing to pre-tax retirement accounts like a 401(k) or 403(b). Every dollar contributed reduces your state and federal taxable income.
Also, if you are a homeowner, check if you qualify for the Property Tax Refund, which is filed separately from your income tax return (Form M1PR).
For more specific scenarios, try our Hourly Paycheck Calculator.
Minnesota Standard Deduction (2024)
Minnesota allows taxpayers to claim a standard deduction that reduces taxable income. For the 2024 tax year, the amounts are:
- Single: $14,575
- Married Filing Jointly: $29,150
- Head of Household: $21,900
Unlike many states that simply follow the federal standard deduction, Minnesota sets its own amounts, which are adjusted annually for inflation. You can also choose to itemize deductions if your qualifying expenses exceed the standard deduction amount.
Property Tax Refund Program
Minnesota offers one of the nation's best property tax relief programs. The Property Tax Refund provides substantial tax relief for homeowners and renters who meet income requirements.
Regular Property Tax Refund
This is available to homeowners with household income below $128,280 and property taxes exceeding a certain percentage of income. The refund amount depends on your income level and property tax burden.
Special Property Tax Refund
If your property taxes increased by more than 12% over the prior year, and the increase was at least $100, you may qualify for an additional special refund. This helps protect homeowners from sudden large property tax increases.
Renter's Property Tax Refund
Even if you rent rather than own, Minnesota considers a portion of your rent as property tax equivalency. Renters with household income under $69,600 may qualify for a refund. The maximum refund can exceed $2,500 for low-income households.
K-12 Education Credit and Subtraction
Minnesota is one of the few states that provides direct tax relief for K-12 education expenses, even for public school students.
- Education Subtraction: Reduces taxable income up to $1,625 per child (grades K-6) or $2,500 per child (grades 7-12). Available for educational expenses like tutoring, music lessons, and textbooks.
- Education Credit: A refundable credit up to $1,000 per child for families with income below $37,500. This credit is fully refundable.
These benefits apply to a wide range of educational expenses, including private school tuition, tutoring, and educational supplies. However, they cannot be used for homeschooling curriculum expenses.
Minnesota vs. Wisconsin Tax Comparison
Many residents in the Minneapolis-St. Paul metropolitan area live near the Wisconsin border. Here's how the two states compare:
- Top Marginal Rate: Minnesota (9.85%) vs. Wisconsin (7.65%). Minnesota has the higher top rate.
- Sales Tax: Minnesota (6.875% state + local) vs. Wisconsin (5.0% state + local). Minnesota's sales tax is generally higher.
- Property Tax: Both states have relatively high property taxes, but Minnesota's refund programs provide more relief for low and middle-income households.
- Social Security: Minnesota now exempts most Social Security income for moderate-income retirees. Wisconsin has a more limited exemption.
Overall, Minnesota has higher taxes but also provides more generous credits and property tax relief programs. The net impact depends heavily on your specific income level and family situation.
Military Pay and Veterans Benefits
Minnesota provides special tax treatment for military personnel and veterans:
- Active Duty Pay: Generally taxable, but Minnesota offers a subtraction for pay earned while deployed outside Minnesota.
- National Guard Pay: For 2024, Minnesota allows a subtraction of up to $15,000 for Minnesota National Guard pay.
- Military Pension: Minnesota recently enacted a pension exclusion for military retirees, allowing qualifying veterans to exclude retirement pay from state taxation.