Minnesota Individual Income Tax Filing Process

Minnesota’s individual income tax system is progressive, meaning the tax rate increases as income rises. All residents, and nonresidents who earn income within the state, are subject to this tax. The process involves determining your requirement to file, calculating taxable income with state-level adjustments, applying tax rates, and reducing the amount owed through credits.

Determining Your Filing Requirement

Your requirement to file a Minnesota income tax return depends on your residency status and gross income. Minnesota defines three residency categories. A full-year resident is someone who considers Minnesota their permanent home or maintains an abode in the state and spends more than 183 days of the year there. A part-year resident is an individual who moved into or out of Minnesota during the tax year. A nonresident is someone who was not a resident of Minnesota at any point during the year but earned income from Minnesota sources.

The requirement to file is triggered by specific gross income thresholds, which vary by filing status. For the 2024 tax year, a single individual under age 65 must file if their gross income is at least $14,575. For those married and filing a joint return, the threshold is $29,150 if both spouses are under 65. These thresholds are adjusted for age, increasing for individuals 65 or older. Part-year residents and nonresidents must file if their Minnesota-source income meets the state’s minimum filing requirements. Even if your income is below these levels, you should file a return to claim a refund for any state taxes withheld from your pay or to receive refundable credits.

Calculating Your Minnesota Taxable Income

Calculating your Minnesota taxable income begins with your federal adjusted gross income (AGI). Minnesota law requires specific adjustments to this federal figure, as certain income not taxed federally is taxed by Minnesota, and some income taxed federally is exempt at the state level. These adjustments are made using Schedule M1M, Income Additions and Subtractions.

Minnesota Additions

Certain income must be added back to your federal AGI. An example is interest from municipal bonds issued by states other than Minnesota. While this interest is exempt from federal income tax, Minnesota requires you to include it in your state taxable income. Another addition involves federal bonus depreciation; if you claimed this on your federal return, a portion must be added back on your Minnesota return. Other additions can include expenses deducted on a federal return that relate to income not taxed by Minnesota.

Minnesota Subtractions

Other amounts can be subtracted to lower your Minnesota taxable income. A subtraction is available for a portion of Social Security benefits. While the federal government may tax up to 85% of your benefits, Minnesota allows a subtraction that can reduce or eliminate the state tax on this income, depending on your overall income level.

Other subtractions are available for:

• Federal active-duty military pay for Minnesota residents.
• Military retirement pay, including pensions.
• The K-12 Education Subtraction for qualifying education-related expenses. For the 2024 tax year, this subtraction is up to $1,625 per child in grades K-6 and $2,500 per child in grades 7-12.
• Contributions to a 529 college savings plan.
• Benefits received from the Railroad Retirement Board.

Minnesota Tax Rates and Credits

After calculating your Minnesota taxable income, you apply the state’s tax rates. Minnesota uses a graduated tax rate structure with four brackets for the 2024 tax year: 5.35%, 6.80%, 7.85%, and 9.85%. For a single filer, the first $31,690 of taxable income is taxed at 5.35%, with subsequent income taxed at higher rates. An additional 1% tax applies to net investment income over $1 million for the 2024 tax year.

Once your initial tax is calculated, you can reduce it by claiming tax credits. The Property Tax Refund is available to both homeowners and renters. For homeowners, the refund is claimed on Form M1PR and is based on household income and property tax paid. A special refund is also available if your property tax increased by more than 12% and at least $100 from the previous year. Renters claim the credit on Schedule M1RENT.

Other credits include:

• The Child and Dependent Care Credit for expenses paid for care so you could work. For 2024, this can be up to $2,100 for one qualifying person or $4,200 for two or more.
• The K-12 Education Credit, claimed on Schedule M1ED, for 75% of qualifying educational expenses for children in grades K-12, subject to income limitations.
• The Child Tax Credit of up to $1,750 per child for the 2024 tax year.

Required Information and Forms for Filing

To file your Minnesota taxes, you need a copy of your federal income tax return (Form 1040) and all income statements, like Form W-2 and any Form 1099s. You also need supporting documentation for any deductions and credits claimed, such as itemized receipts for the K-12 Education Credit or Subtraction.

The primary form for filing is Form M1, the Individual Income Tax Return, which is available on the Minnesota Department of Revenue’s website. When completing Form M1, you will transfer your AGI and Minnesota tax withheld from your federal return and W-2s.

Filing and Paying Your Minnesota Taxes

The annual deadline to file and pay Minnesota state income tax is April 15. For the 2024 tax year, the deadline is April 15, 2025. Minnesota grants an automatic six-month extension to file until October 15, 2025, but this is not an extension to pay. Any tax owed is due by the April deadline to avoid penalties and interest.

You can submit your return by electronic filing (e-file) or by mailing a paper return. E-filing through tax software or a professional is faster and more secure. If mailing a paper return with a payment, send it to the Minnesota Department of Revenue, St. Paul, MN 55145-0010. If mailing without a payment, send it to the Minnesota Department of Revenue, St. Paul, MN 55145-0020.

If you owe a balance, you can pay electronically from your bank account for free via the state’s e-Services Payment System, or by credit or debit card for a fee. If filing by mail, you can send a check or money order with a payment voucher.