Minnesota — Personal Income Tax

Minnesota imposes personal income tax on residents, part-year residents, and nonresidents who meet minimum filing requirements. The filing obligation depends on residency status and gross income levels.

## Full-Year Residents

An individual who is a Minnesota resident for the entire taxable year is not required to file a Minnesota income tax return if the individual's gross income derived from Minnesota sources, less certain subtractions, is below the filing threshold for a single full-year resident. Source: Minn. Stat. § 289A.08, subd. 1(a)(2)

The commissioner of revenue annually determines the gross income levels at which individuals must file, based on the standard deduction amounts. Source: Minn. Stat. § 289A.08, subd. 1(d)

For 2025 tax returns due in 2026, the Minnesota Department of Revenue sets the filing requirement at $14,950 for single filers under age 65. Source: Minnesota Department of Revenue — Who Must File

Individuals who filed a joint federal income tax return must also file a joint Minnesota return. Source: Minn. Stat. § 289A.08, subd. 6

## Nonresidents

A nonresident is an individual who is not a Minnesota resident for any part of the year but who earns income from Minnesota sources. A nonresident is not required to file a Minnesota income tax return if gross income from Minnesota sources is below the filing requirement for a single full-year resident. Source: Minn. Stat. § 289A.08, subd. 1(a)(1)

Income from Minnesota sources is determined under the allocation and assignability rules in Minn. Stat. §§ 290.081 and 290.17, which govern how wages, business income, and other items are assigned to the state. Source: Minn. Stat. § 289A.08, subd. 1(a)(1)

## Part-Year Residents

A part-year resident who moved to or from Minnesota during the year must file if Minnesota gross income meets the minimum filing requirement. Source: Minnesota Department of Revenue — Part-Year Residents

Part-year residents and nonresidents use the under-age-65 single filing threshold regardless of age or actual filing status. Source: Minnesota Department of Revenue — Who Must File

## Mandatory Filing Regardless of Income

Notwithstanding the general rule, an individual must file a Minnesota income tax return for any taxable year in which the taxpayer elected to receive advance payments of the child tax credit under Minn. Stat. § 290.0661, subd. 8. Source: Minn. Stat. § 289A.08, subd. 1(e)

## Definition of Gross Income

The term "gross income" has the same meaning as in Minn. Stat. § 290.01, subd. 20, which generally follows the federal definition of gross income before any deductions. Source: Minn. Stat. § 289A.08, subd. 1(c)

Minnesota imposes personal income tax at four graduated rates: 5.35%, 6.80%, 7.85%, and 9.85%. These rates apply to progressively higher brackets of Minnesota taxable income and vary by filing status. The rate percentages are fixed by statute, but the income thresholds to which each rate applies are adjusted annually for inflation.

Source: Minn. Stat. § 290.06, subd. 2c

Minnesota defines "resident" for personal income tax purposes in two ways. First, any individual domiciled in Minnesota is a resident, except that a qualified individual under Internal Revenue Code section 911 is not treated as a resident if homestead status is revoked within three months of moving out of the country. Second, any individual domiciled outside Minnesota who maintains a place of abode in the state and spends in the aggregate more than one-half of the tax year in Minnesota is also treated as a resident, unless the individual or spouse is in the armed forces or the individual is covered under reciprocity provisions. For purposes of the 183-day rule, presence within the state for any part of a calendar day constitutes a day spent in the state.

Source: Minn. Stat. § 290.01, subd. 7

Minnesota personal income tax returns for calendar-year filers are due April 15 following the close of the tax year. Fiscal-year returns are due on the 15th day of the fourth month following the close of the fiscal year. The tax must be paid on or before the filing due date, or the extended due date if an extension is granted. An extension of time to file does not extend the time to pay; payment remains due on the original April 15 deadline to avoid penalties and interest.

Source: Minn. Stat. § 289A.18, subd. 1 Source: Minn. Stat. § 289A.20, subd. 1(a)

Minnesota imposes graduated personal income tax at four rates—5.35%, 6.80%, 7.85%, and 9.85%—on taxable net income, with income thresholds that vary by filing status. The dollar thresholds defining each bracket are recalculated annually by the commissioner of revenue to prevent "bracket creep" caused by inflation.

## Statutory Framework

Minn. Stat. § 290.06, subd. 2c sets out four separate rate schedules: (a) married filing jointly and surviving spouses; (b) unmarried individuals; (c) heads of household; and (d) married filing separately, estates, and trusts. The married-filing-separately brackets are one-half of the married-filing-jointly brackets after inflation adjustment.

Source: Minn. Stat. § 290.06, subd. 2c

## Annual Inflation Adjustment

The commissioner annually adjusts the minimum and maximum dollar amounts for each rate bracket under Minn. Stat. § 290.06, subd. 2d, as provided in section 270C.22. The statutory base year is tax year 2019. The rate percentages themselves do not change; only the income levels at which they apply are adjusted. The brackets are rounded to the nearest $10; if a bracket ends in $5, it rounds up to the nearest $10.

The inflation factor is the change in the U.S. Chained Consumer Price Index for all urban consumers. For tax year 2025, the brackets increased by 2.886 percent from 2024. For tax year 2026, the brackets increase by 2.369 percent from 2025.

Source: Minn. Stat. § 290.06, subd. 2d Source: Minnesota Department of Revenue — 2025 Inflation Announcement Source: Minnesota Department of Revenue — 2026 Inflation Announcement

## Bracket Tables Published Annually

The Minnesota Department of Revenue publishes the adjusted bracket tables annually on its website under "Income Tax Rates and Brackets." These tables show the taxable-income threshold at which each rate applies, for each filing status, and are the operative authority for practitioners computing tax liability in a given year.

Source: Minnesota Department of Revenue — Income Tax Rates and Brackets

## Example Application — Tax Year 2025

For illustration, the 2025 brackets for married filing jointly are structured so that the 5.35% rate applies to the first tier of income, the 6.80% rate applies to the next tier, the 7.85% rate applies to the third tier, and the 9.85% rate applies to income above the fourth threshold. The specific dollar thresholds for 2025 reflect the 2.886% inflation adjustment applied to the 2024 thresholds.

Because the brackets change every year, a practitioner must confirm the current-year thresholds from the Department of Revenue's published tables or from the inflation-adjusted amounts incorporated into the current-year Form M1 instructions.

Source: Minnesota Department of Revenue — 2025 Inflation Announcement

Minnesota taxes nonresidents only on income derived from Minnesota sources. The sourcing rules differ based on whether the income arises from the conduct of a trade or business or from other sources. This section addresses nonbusiness income; business income subject to apportionment is governed by Minn. Stat. §§ 290.17, subd. 3, and 290.191.

## Wages and Compensation for Personal Services

Income from wages, as defined in Internal Revenue Code sections 3401(a), (f), and (i), is assigned to Minnesota if, and to the extent that, the work of the employee is performed within the state. All other wage income is treated as income from sources outside Minnesota. The statute applies a physical-presence test: where the work is actually performed controls the allocation.

Severance pay is treated as income from labor or personal services and is sourced under the same rule—it is Minnesota-source income to the extent the underlying work was performed in Minnesota.

Retirement income received by a nonresident is not taxable under Minnesota law. Minn. Stat. § 290.17, subd. 2(a)(3) provides that amounts received by a nonresident as "retirement income" as defined in section (b)(1) of the State Income Taxation of Pension Income Act, Public Law 104-95, are not considered income derived from carrying on a trade or business or from wages for work performed in Minnesota, and are not taxable. This includes qualified pension, annuity, and retirement distributions.

Source: Minn. Stat. § 290.17, subd. 2(a)(1) Source: Minn. Stat. § 290.17, subd. 2(a)(3)

## Athletes and Entertainers — Special Allocation

Nonresident athletes and entertainers are subject to a modified allocation method.

For salaried athletic team employees (professional athletes), Minnesota-source income is determined by multiplying total compensation by a duty-days fraction. The numerator is the total number of duty days spent in Minnesota; the denominator is the total number of duty days. A duty day is any day the individual is under a duty to perform for the employer. Off-season training activities are excluded unless conducted at the team's facilities as part of a team-imposed program.

For other athletes and entertainers not covered by the salaried-employee rule, Minnesota assigns to the state all income from performances or athletic contests that occur in Minnesota.

Source: Minn. Stat. § 290.17, subd. 2(a)(2)

## Income from Tangible Property Located in Minnesota

Income or gains from tangible property located in Minnesota that is not employed in the business of the recipient must be assigned to Minnesota. This rule applies to rental income from Minnesota real property, royalties from mineral interests located in the state, and gains on the sale of Minnesota tangible property that the nonresident held for investment (not business) purposes.

If the tangible property is employed in the taxpayer's trade or business, the income is business income subject to apportionment under Minn. Stat. § 290.17, subd. 3, rather than direct assignment under subdivision 2(b).

Source: Minn. Stat. § 290.17, subd. 2(b)

## Income from Intangible Property

Income or gains from intangible personal property not employed in the business of the recipient is assigned to Minnesota only if the recipient is a Minnesota resident or a resident trust or estate.

Nonresidents are generally not taxed on investment income from intangibles—interest, dividends, capital gains from securities, royalties from patents or copyrights—unless the intangible property is employed in a trade or business with Minnesota nexus (in which case the income is business income subject to apportionment).

Source: Minn. Stat. § 290.17, subd. 2(c)

## Gambling Winnings

Income from winnings on a bet made by an individual while in Minnesota is assigned to the state. For this purpose, "bet" has the meaning given in Minn. Stat. § 609.75, subd. 2, as limited by § 609.75, subd. 3, clauses (1), (2), and (3). A nonresident who gambles at a Minnesota casino, racetrack, or other venue and wins must report the winnings as Minnesota-source income.

Source: Minn. Stat. § 290.17, subd. 2(d)

## Residual Rule — All Other Nonbusiness Income

All items of gross income not specifically covered by subdivisions 2(a) through 2(d) and not part of the taxpayer's income from a trade or business are assigned to the taxpayer's domicile. This means that miscellaneous nonbusiness income of a nonresident—prizes, awards, hobby income, and other items not enumerated above—is generally not Minnesota-source income unless the nonresident is domiciled in Minnesota (in which case the individual would be a resident, not a nonresident).

Source: Minn. Stat. § 290.17, subd. 2(e)

## Employee Status and Trade-or-Business Definition

For purposes of the sourcing rules in Minn. Stat. § 290.17, working as an employee is not considered to be conducting a trade or business. This definitional rule ensures that wage income is sourced under the specific wage rule in subdivision 2(a)(1), not under the business-income apportionment rules in subdivision 3.

Source: Minn. Stat. § 290.17, subd. 2(f)

## Interaction with Filing Requirements

A nonresident is required to file a Minnesota income tax return only if the individual's gross income derived from Minnesota sources, as determined under Minn. Stat. §§ 290.081(a) and 290.17, meets or exceeds the filing threshold for a single full-year resident. See the Filing Requirements — Who Must File section for the specific dollar thresholds.

Source: Minn. Stat. § 289A.08, subd. 1(a)(1)