2024 Minnesota Tax Brackets and Rates

Minnesota’s income tax system is progressive, meaning the tax rate increases as income rises. For the 2024 tax year, the state uses four distinct tax rates that apply to different income brackets. These income thresholds are adjusted each year by the Minnesota Department of Revenue to account for inflation. This annual adjustment helps prevent “bracket creep,” a situation where inflation pushes taxpayers into higher tax brackets even though their real purchasing power has not increased.

2024 Minnesota Income Tax Rates and Brackets

For the 2024 tax year, Minnesota’s four income tax rates are 5.35%, 6.80%, 7.85%, and 9.85%. These rates are applied to income brackets that differ based on your filing status.

For a Single filer, the 5.35% rate applies to the first $31,690 of taxable income, while for those Married Filing Jointly, this bracket covers the first $46,331. The top rate of 9.85% applies to income over $193,240 for Single filers and over $321,450 for those Married Filing Jointly.

A Head of Household filer will pay 5.35% on their first $39,010 of income. The brackets for the Married Filing Separately status are exactly half of the Married Filing Jointly brackets, so the 5.35% rate applies to income up to $23,165.

Determining Your Minnesota Taxable Income

Before the tax brackets can be applied, a taxpayer must calculate their Minnesota taxable income. This calculation begins with the federal adjusted gross income (AGI) from a federal tax return. From the federal AGI, state-specific additions and subtractions are applied before subtracting the appropriate Minnesota deduction.

Most taxpayers use the state’s standard deduction, a fixed dollar amount that reduces taxable income. For 2024, the standard deduction for Single filers and those Married Filing Separately is $14,575. For Married Filing Jointly, the standard deduction is $29,150, and for Head of Household filers, it is $21,900.

Taxpayers can choose to itemize deductions instead of taking the standard deduction. This involves summing up specific expenses, such as medical costs, certain taxes, and charitable contributions. It is generally advantageous to itemize only if the total of these deductions is greater than the standard deduction for your filing status.

Applying the Brackets to Your Income

The process involves calculating the tax for each segment of your income within each bracket and then summing those amounts to find your total tax liability.

Consider a Single filer with a Minnesota taxable income of $95,000. The first $31,690 of their income is taxed at 5.35%, resulting in a tax of $1,695.42. The next portion of their income, from $31,691 up to $95,000, falls into the second bracket. This amount ($63,310) is taxed at the 6.80% rate, which calculates to $4,305.08.

The total tax liability for this individual is the sum of the tax from each bracket: $1,695.42 plus $4,305.08, for a total Minnesota income tax of $6,000.50. This example shows that even though the taxpayer’s income reaches the 6.80% bracket, their overall effective tax rate is lower than that marginal rate.

Key Minnesota Tax Credits and Subtractions

Minnesota offers specific tax credits and subtractions that can reduce a taxpayer’s final tax bill. A subtraction reduces your taxable income, while a credit provides a dollar-for-dollar reduction of the tax you owe.

For 2024, the new Minnesota Child Tax Credit provides up to $1,750 per qualifying child, with no limit on the number of children. The credit amount begins to phase out at higher income levels. This state-level credit is distinct from any federal child tax credit.

Another provision is the expanded subtraction for Social Security income. For the 2024 tax year, Minnesota allows taxpayers to subtract a larger portion of their Social Security benefits from their state income calculation, depending on their provisional income. This reduces the amount of retirement income subject to state tax for many seniors.