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)

Minnesota maintains income tax reciprocity agreements with Michigan and North Dakota under Minn. Stat. § 290.081 and as recognized in Minnesota Rule 8002.0200, subp. 6. These agreements are intended to prevent double taxation on personal service income earned by residents who commute across state lines for work.

Covered States (as of 2024):

• Michigan (active)
• North Dakota (active)

Minnesota's reciprocity agreement with Wisconsin was terminated after the 2009 tax year. As of the most recent Department of Revenue Fact Sheet 4 (revised May 2024), no other states have a reciprocity agreement with Minnesota.

Types of Income Covered The reciprocity agreements cover only compensation for personal or professional services physically performed by the employee (wages, salaries, tips, commissions, bonuses, or similar compensation). Other types of income—such as business profits, rents, investment gains, or retirement income—are not covered and are sourced to Minnesota under general rules if arising from Minnesota sources.

Key Limitations and Requirements

• The taxpayer must be a resident of Michigan or North Dakota and commute to Minnesota for work, returning to their state of residence at least once each month.
• The Minnesota employer must have a completed Form MWR (Minnesota Withholding Reciprocity Declaration) on file for the employee to forego Minnesota withholding.
• Reciprocity does not apply to part-year residents or to individuals who moved to Minnesota during the tax year.
• Income from remote work physically performed outside Minnesota (e.g., from Michigan or North Dakota) is not Minnesota-source income and is not subject to Minnesota withholding—regardless of reciprocity.

Authority and Effective Dates

• Minn. Stat. § 290.081 authorizes these agreements.
• Minn. R. 8002.0200, subp. 6 enumerates the current reciprocal states and conditions.
• The Wisconsin reciprocity agreement was formally discontinued after tax year 2009. The Department of Revenue Fact Sheet 4 provides a practical summary. Practitioners should always confirm the latest agreement status with the most recent DOR guidance.

Source: Minn. Stat. § 290.081 Source: Minnesota Rule 8002.0200, subpart 6 Source: Minnesota Department of Revenue — Reciprocity Income Tax Fact Sheet 4

Human confirmation status: Not yet human confirmed.

Minnesota grants filers an automatic extension to file their individual income tax return, but this extension applies only to the act of filing and not to payment of taxes owed.

Automatic Extension Minnesota does not require a separate application or form to request an extension of time to file the state personal income tax return. All individual filers receive an automatic six-month extension, which moves the filing deadline from April 15 to October 15 for calendar-year taxpayers. This automatic extension matches the federal extended due date for individual returns (Form 1040), but a federal extension request does not extend Minnesota payment deadlines.

Payment Deadline The automatic extension applies only to the filing of the return. Taxpayers must pay any balance of Minnesota income tax due by the regular due date (April 15 for most individual filers). Failure to pay in full by that date generally subjects the unpaid amount to penalties and interest, even if the return itself is filed within the extended period.

Penalty Relief for Timely Partial Payment Minnesota statute provides limited penalty relief for late payments if the taxpayer (1) pays at least 90% of their Minnesota tax liability by the original due date; (2) files the return within six months of that due date (by October 15 for calendar-year filers); and (3) pays the remaining amount of tax owed at the time the late return is filed. If these conditions are met, the usual 4% late payment penalty is not imposed, but interest still accrues until the balance is paid in full.

No Extension for Payment It is important to note the extension does not grant more time to pay the tax. Any unpaid liability after April 15 is subject to interest, regardless of the reason for delay.

Source: Minnesota Department of Revenue — Filing Extensions Source: Minn. Stat. § 289A.60, subd. 1(c)

Minnesota requires nonresident individuals who conduct a trade or business partly within and partly without the state to apportion their business income under a formula set by statute. The rules for how this income is sourced and divided between Minnesota and other states are found in Minn. Stat. § 290.17, subd. 3, and the apportionment formula itself is given in Minn. Stat. § 290.191.

Statutory Sourcing and Apportionment Rule Under Minn. Stat. § 290.17, subd. 3, all income from a trade or business carried on partly inside and partly outside Minnesota is subject to apportionment, except for categories of “nonbusiness income” enumerated in the statute that are directly allocated. This rule applies whether the taxpayer is a nonresident individual, a partnership, an S corporation, or a corporation with Minnesota-source business activity. Nonresident individuals may have apportionable Minnesota-source income from partnerships, LLCs, or sole proprietorships operating both within and outside Minnesota, and such income must be apportioned using the method described below.

Apportionment Formula (Single-Sales-Factor for 2014 and after) Minnesota employs the apportionment formula found in Minn. Stat. § 290.191. For tax years beginning after December 31, 2013, Minnesota uses a single-sales-factor formula to apportion trade or business income:

> Minnesota Apportionment Percentage = (Minnesota Sales) ÷ (Total Sales)

Only the sales factor is used. Prior versions of the formula (pre-2014) used a weighted-average of property, payroll, and sales, but since 2014, only gross receipts from sales attributable to Minnesota are considered. The numerator is the total sales assigned to Minnesota under sourcing rules in Minn. Stat. § 290.191, subd. 5, and the denominator is total sales everywhere. Property and payroll factors are disregarded for years after 2013.

Nonbusiness Income Exception Certain categories of income—such as rents or royalties from intangibles, capital gains from sales of certain property, or nonbusiness interest and dividends—are allocated directly and not apportioned, as specified in Minn. Stat. § 290.17, subd. 2.

Reporting and Reference Nonresident individuals with Minnesota-source business income report the apportioned share on Minnesota Form M1NR (Nonresident and Part-Year Resident Income Allocation). Partnerships and S corporations generally complete and provide a copy of Schedule KPI (or KS for S corps) showing Minnesota apportionment.

Source: Minn. Stat. § 290.17, subd. 3 Source: Minn. Stat. § 290.191

Not yet human confirmed.

In Minnesota, estimated income-tax payments by individuals are required if the taxpayer’s expected Minnesota tax liability, after withholding and refundable credits, is $500 or more. If the amount expected to be owed is less than $500, no penalty for underpayment applies. Source: Minnesota Statutes § 289A.25, subdivision 4 (No addition to tax where tax is small)

For taxpayers with an obligation to make estimated payments, the required annual payment is defined as the lesser of:

• 90 percent of the current year’s Minnesota tax liability; or
• 100 percent of the prior year’s liability (or 110 percent if adjusted gross income on that return exceeded $150,000).

Source: Minnesota Statutes § 289A.25, subdivision 5(1)–(2)

Estimated payments are made in four equal installments (25 percent of the required annual payment) due on the following dates:

• 1st installment: April 15
• 2nd installment: June 15
• 3rd installment: September 15
• 4th installment: January 15 of the following year

Source: Minnesota Statutes § 289A.25, subdivision 3(b) and 5 (Amount & due dates)

Additional provisions:

• Special rule for farmers and fishermen: Only one installment is required, due January 15 following the tax year, and the required annual payment is computed at 66⅔ percent of the current year’s tax. The late-payment penalty for this installment is waived if the return is filed and tax is paid by March 1.

Source: Minnesota Statutes § 289A.25, subdivision 10

• Short taxable years or fiscal-year filers: If an individual’s taxable year is not a calendar year, apply these same timing rules substituting the corresponding months for the installment dates. Where the taxable year is shorter, state law provides prorated schedule adjustments.

Source: Minnesota Statutes § 289A.25, subdivision 11 (Fiscal-year taxpayer)

Minnesota's individual income tax brackets are set annually by the Department of Revenue as required by statute. For tax years 2025 and 2026, there are four graduated rates—5.35%, 6.80%, 7.85%, and 9.85%—and the income thresholds at which each rate applies are inflation-adjusted each year for each filing status: single, married filing jointly, head of household, and married filing separately.

Tax Year 2025 Brackets

• Single Filers:
• 5.35%: $0 – $30,110
• 6.80%: $30,111 – $99,340
• 7.85%: $99,341 – $183,340
• 9.85%: $183,341 and up
• Married Filing Jointly:
• 5.35%: $0 – $44,340
• 6.80%: $44,341 – $176,670
• 7.85%: $176,671 – $299,090
• 9.85%: $299,091 and up
• Head of Household:
• 5.35%: $0 – $39,590
• 6.80%: $39,591 – $159,690
• 7.85%: $159,691 – $258,590
• 9.85%: $258,591 and up
• Married Filing Separately:
• 5.35%: $0 – $22,170
• 6.80%: $22,171 – $88,335
• 7.85%: $88,336 – $149,545
• 9.85%: $149,546 and up

Tax Year 2026 Brackets

• Single Filers:
• 5.35%: $0 – $30,820
• 6.80%: $30,821 – $101,670
• 7.85%: $101,671 – $187,690
• 9.85%: $187,691 and up
• Married Filing Jointly:
• 5.35%: $0 – $45,390
• 6.80%: $45,391 – $181,860
• 7.85%: $181,861 – $307,170
• 9.85%: $307,171 and up
• Head of Household:
• 5.35%: $0 – $40,530
• 6.80%: $40,531 – $164,460
• 7.85%: $164,461 – $266,720
• 9.85%: $266,721 and up
• Married Filing Separately:
• 5.35%: $0 – $22,695
• 6.80%: $22,696 – $90,930
• 7.85%: $90,931 – $153,585
• 9.85%: $153,586 and up

These thresholds apply to taxable income after Minnesota subtractions and deductions. If a filer's income passes into the next bracket, only the income above that bracket's starting point is taxed at the higher rate. The annual bracket tables are published by the Minnesota Department of Revenue and reflect statutory adjustments per Minn. Stat. § 290.06, subd. 2c-2d.

Source: Minnesota Department of Revenue — Income Tax Rates and Brackets Source: Minn. Stat. § 290.06, subd. 2c, 2d

If Minnesota's personal income tax filing or payment deadline (normally April 15 for calendar-year filers) falls on a Saturday, Sunday, or legal holiday recognized by the state, the due date is automatically moved to the next business day that is not a Saturday, Sunday, or legal holiday. This rule applies to all Minnesota Department of Revenue filing and payment obligations unless a specific provision states otherwise.

Statutory Rule: Minn. Stat. § 270C.39 directs that when the last day prescribed by law for filing a return or making payment falls on a weekend or legal holiday (as defined in Minn. Stat. § 645.44, subd. 5), the act is considered timely if performed on the next day that is not a Saturday, Sunday, or legal holiday. The operative term is “legal holiday,” which includes Minnesota state holidays—not just federal holidays. Thus, if April 15 (or another statutory deadline) falls on a Minnesota state holiday that is not a federal holiday, the deadline is postponed to the next business day.

Relation to Federal Rule: Minnesota’s rule is parallel to the federal Internal Revenue Code § 7503, but is set out in state statute and is not automatically tied to the federal holiday calendar. Minnesota law references its own list of legal holidays under Minn. Stat. § 645.44, which may differ from the federal list.

Examples:

• If April 15 is a Saturday, the deadline moves to Monday, April 17 (assuming Monday is not a holiday).
• If April 15 falls on Emancipation Day (a recognized legal holiday in Washington, D.C., but not Minnesota), Minnesota does not follow the federal shift unless Emancipation Day is also a holiday under Minnesota law.
• If April 15 falls on a Minnesota-recognized holiday, the deadline moves to the following business day, even if not a federal holiday.

Department of Revenue Practice: The Minnesota Department of Revenue confirms on its Income Tax Due Dates page that if a due date falls on a weekend or legal holiday, returns and payments are timely if received by the next business day.

Source: Minn. Stat. § 270C.39 Source: Minnesota Department of Revenue — Income Tax Due Dates

Minnesota's statutory residency rule generally treats nondomiciliaries who maintain an abode in the state and spend more than one-half of the tax year (183 days or more) in Minnesota as residents for income tax purposes. However, there is a specific exception for military service members and their spouses.

Under Minn. Stat. § 290.01, subd. 7(b), the 183-day rule expressly does not apply to "an individual or the spouse of an individual who is in the armed forces of the United States." This means nonresidents who are in Minnesota solely due to military orders (or as accompanying spouses) are not treated as Minnesota statutory residents by virtue of the 183-day presence test alone. The exception covers only Minnesota's rule; the statute does not address residency determinations by other states.

Key points:

• The exception applies whether it is the individual service member or their spouse who would otherwise be subject to the 183-day rule.
• This relief is limited to the operation of Minnesota’s statutory residency framework and does not create exemptions for military personnel under other states' laws.
• Presence in Minnesota due solely to military obligations will not, by itself, trigger Minnesota resident status for income tax, provided the individual is not otherwise domiciled in Minnesota.

Statutory text: > "This paragraph does not apply to an individual or the spouse of an individual who is in the armed forces of the United States..."

Source: Minn. Stat. § 290.01, subd. 7(b)

Human confirmation status: Not yet human confirmed.

Minnesota automatically grants individuals a six‑month extension to file the Minnesota individual income tax return (Form M‑1), moving the due date from April 15 to October 15, provided the tax owed is paid by April 15 of the filing year. Filing IRS federal extension Form 4868 does not affect the Minnesota filing deadline—no reference to IRS Form 4868 is required to secure the Minnesota extension, and no separate statewide extension request form exists. Minnesota’s extension applies solely to filing, not to payment, and failure to pay by April 15 can result in penalties and interest even if filing is submitted by October 15.

Source: Minnesota Department of Revenue — 2025 Form M‑1 instructions (automatic extension provided; payment still due April 15) Source: Minnesota Department of Revenue — Filing Extensions (automatic extension covers filing deadline)

Nonresidents are taxed by Minnesota only on compensation for personal services to the extent those services were actually performed within the state. Under Minnesota Statutes § 290.17(a)(1), “income from wages … is assigned to this state if, and to the extent that, the work of the employee is performed within it.”

Minnesota Department of Revenue guidance (Withholding Fact Sheet 19) reiterates this rule: wages earned by nonresidents are assigned to Minnesota based solely on the portion of services performed in Minnesota. This framework applies uniformly—even under hybrid or remote-work scenarios; there is no differential or temporary sourcing rule (including none stemming from COVID‑19-era policies) superseding the statutory requirement.

In practical terms: if a nonresident employee splits time working remotely from outside Minnesota with some days physically present in the state, only the compensation attributable to the in‑state working days is subject to Minnesota withholding and tax.

There are specific interstate exceptions for certain transportation and airline employees under federal law, described elsewhere in this guide, but those do not apply to standard telecommuting or hybrid‑work arrangements.

Source: Minnesota Statutes § 290.17(a)(1) Source: Minnesota Department of Revenue, Withholding Fact Sheet 19: Assigning Employee Income to Minnesota

Not yet human confirmed.

For nonresidents who are granted or receive nonqualified deferred compensation—including nonstatutory stock options, restricted stock units (RSUs), and similar equity-based awards—Minnesota law requires that the amount taxable as Minnesota-source income be allocated based on services performed within and outside the state during the period when the right to the compensation was earned.

Allocation Formula:

• The portion of deferred compensation (including the spread on exercised options or the value of vested RSUs) that is sourced to Minnesota is determined by multiplying the total deferred compensation by a fraction:
• Numerator: Workdays in Minnesota within the allocation (vesting/service) period
• Denominator: Total workdays everywhere within that period
• This allocation formula applies regardless of whether the recipient is currently an employee, has separated from service, or is a former employee.
• The allocation (vesting/service) period is defined as the period during which the employee’s right to the deferred compensation was earned—commonly the grant-to-vest or grant-to-exercise period for options/RSUs.

Specific Rule for Payment After Leaving Minnesota: If the individual is a nonresident of Minnesota both when the rights were earned and at the time of payment (e.g., exercise or vesting), only the allocated portion is Minnesota-source income. If the individual is a Minnesota resident at the time of payment, Minnesota claims full tax on the total amount—even if some services were performed out of state.

Authority and Practical Guidance: Minnesota Department of Revenue’s Withholding Fact Sheet 19 sets out these rules explicitly, including examples and confirmation that no further proration or unique regime exists for RSUs or options beyond the allocation method described. Minnesota Revenue Notice #08-10 clarifies that such allocation is required for nonqualified deferred compensation and that qualified-plan and statutory stock option income is generally excluded per federal law.

Source: Minnesota Department of Revenue, Withholding Fact Sheet 19: Assigning Employee Income to Minnesota Source: Minnesota Department of Revenue Revenue Notice #08-10

Not yet human confirmed.

Minnesota grants an automatic six-month extension to file the state individual income tax return, regardless of whether the taxpayer has requested or obtained a federal filing extension. Taxpayers do not need to apply separately or submit proof of a federal IRS extension (Form 4868) in order to qualify for Minnesota’s extension of time to file. The automatic extension applies to all filers.

No linkage to federal extension Requesting a federal extension (by submitting IRS Form 4868) is not required to obtain the Minnesota extension, and Minnesota does not require taxpayers to submit a copy of the federal extension form. The state extension is automatically granted to all filers, and there is no separate Minnesota application or form. Guidance in the 2025 Form M-1 Instructions and on the Department of Revenue's Filing Extensions page confirm that a federal extension neither shortens nor lengthens the state extension period and is not a prerequisite for the state extension.

Payment vs. Filing The Minnesota extension applies to the act of filing only. Tax owed remains due on April 15. An extension to file does not extend the payment due date. Late payment is subject to penalty and interest, even if the underlying return is timely filed within the extended period, unless the penalty-relief “90% paid” rules are met.

Summary table:

• Federal extension requested — No: Automatic state extension (to October 15)
• Federal extension requested — Yes: Automatic state extension (to October 15); no further action needed for state purposes
• Separate Minnesota application required? No
• Proof or copy of federal extension required? No

Authority: Minnesota Department of Revenue – 2025 Form M-1 Instructions; Minnesota DOR Filing Extensions online guidance. Source: Minnesota Department of Revenue — 2025 Form M‑1 Instructions Source: Minnesota Department of Revenue — Filing Extensions

Minnesota imposes a state-level alternative minimum tax (AMT) on individuals, estates, and trusts in addition to its regular individual income tax. The Minnesota AMT is distinct from the federal AMT, with its own base, exemptions, and calculation method. It applies to taxpayers whose alternative minimum taxable income, as defined by state law, exceeds certain exemption thresholds and where the tentative minimum tax exceeds the regular Minnesota income tax liability.

Statutory Authority and Calculation Framework

• The Minnesota AMT is imposed under Minn. Stat. § 290.091 and follows a similar but not identical framework to the federal AMT.
• The taxpayer first computes their Minnesota alternative minimum taxable income (AMTI) by making specific adjustments and add-backs to federal taxable income as detailed in the statute, including adding back certain tax-exempt interest, state and local income taxes, and depreciation differences.
• After calculating AMTI, taxpayers subtract the Minnesota AMT exemption amount. The resulting amount is taxed at a flat 6.75% rate (as set out in § 290.091, subd. 6).

Exemption Amounts and Phase-out (Tax Years 2025–2026)

• The exemption amount for AMT purposes is annually adjusted for inflation; for tax year 2025, the AMT exemption is $81,400 for married taxpayers filing jointly and surviving spouses; $62,050 for single filers and heads of household; and $40,700 for married taxpayers filing separately and for trusts/estates.
• The exemption amount is phased out for higher-income taxpayers at a statutory rate (25% of the excess of AMTI over $218,800 for joint filers and over $109,400 for married filing separately/single/head of household).
• AMT is imposed only to the extent the tentative AMT exceeds the taxpayer's regular Minnesota income tax after credits.

Additional Surtaxes

• As of tax years 2025 and 2026, Minnesota does not impose any supplemental surtaxes or special schedules for individual AMT beyond what is required by Minn. Stat. § 290.091.

Practical Application

• Most taxpayers do not owe AMT, but it can apply in circumstances where large itemized deductions, significant tax preference items, or adjustments from activities such as exercising incentive stock options or large depreciation differences are present.
• The Department of Revenue publishes annual AMT exemption amounts and worksheets in the Form M1 instructions, which taxpayers and preparers should consult for current-year computations.

Source: Minn. Stat. § 290.091 Source: Minnesota Department of Revenue — 2025 Form M1 Instructions