Retiring in Minnesota: how your income is taxed
Minnesota is less tax-friendly for retirees. On a typical retirement income it ranks #44 of 51 for the lowest state income tax.
The rules in Minnesota
- Social Security: Fully exempt if federal AGI is $86,410 or less (single or head of household) or $110,780 or less (married filing jointly) in 2026. Above that, the subtraction shrinks by 10% for each $4,000 of AGI (or part of $4,000), so higher-income retirees pay Minnesota tax on some or all of their federally taxable benefits.
- Pensions: Private pensions are taxed as ordinary income at Minnesota's 5.35% to 9.85% rates. A public pension subtraction for 2026 allows public retirees up to $13,850 per filer ($27,690 joint), phasing out above the same income levels as the Social Security subtraction. A small elderly or disabled exclusion applies only at very low incomes. Military retirement pay is fully subtracted.
- 401(k), 403(b) and IRA withdrawals: 401(k) and IRA withdrawals are taxed as ordinary income at Minnesota's regular rates.
- At 65 and older: Filers 65 or older add $2,000 to the standard deduction for 2026 ($1,600 per spouse on a joint return).
Calculate your Minnesota retirement taxes
State income tax in Minnesota: $1,214 a year
In Minnesota, the 401(k)/IRA amount counts as IRA withdrawals, which don't qualify for the pension exclusion. Enter withdrawals from employer plans such as a 401(k) or 403(b) as pension.
In Minnesota you'd pay about $1,214 in state income tax and $4,336 in federal income tax on $70,000 of retirement income, keeping $64,450 (7.9% total).
Minnesota ranks #44 of 51 for the lowest state tax on this income. 19 states charge no state income tax on this income.
What retirees pay in Minnesota
| Retirement income | State tax (single) | State tax (married) | Federal tax (single) |
|---|---|---|---|
| $24,000 Social Security, $12,000 401(k)/IRA | $0 | $0 | $0 |
| $30,000 Social Security, $20,000 pension, $20,000 401(k)/IRA | $1,214 | $332 | $4,336 |
| $40,000 Social Security, $40,000 pension, $50,000 401(k)/IRA, $10,000 other income | $7,529 | $5,183 | $19,812 |
Age 67 or older, 2026 rules including the federal senior deduction. For married couples, income is the household total and both spouses are 67 or older. State estimates apply Minnesota's main exclusions and may differ for income-tested credits.
States with lower retirement taxes
Moving to Minnesota in retirement?
Compare the tax on your Social Security, pension and 401(k)/IRA income, and typical living costs, with the state you'd leave. These are the states most households moving to Minnesota come from (IRS migration data, 2022–2023).
- Wisconsin to Minnesota
- North Dakota to Minnesota
- California to Minnesota
- Texas to Minnesota
- Florida to Minnesota
- Iowa to Minnesota
Frequently asked questions
Does Minnesota tax Social Security?
Partly taxed. Fully exempt if federal AGI is $86,410 or less (single or head of household) or $110,780 or less (married filing jointly) in 2026. Above that, the subtraction shrinks by 10% for each $4,000 of AGI (or part of $4,000), so higher-income retirees pay Minnesota tax on some or all of their federally taxable benefits.
Does Minnesota tax pensions?
Taxed. Private pensions are taxed as ordinary income at Minnesota's 5.35% to 9.85% rates. A public pension subtraction for 2026 allows public retirees up to $13,850 per filer ($27,690 joint), phasing out above the same income levels as the Social Security subtraction. A small elderly or disabled exclusion applies only at very low incomes. Military retirement pay is fully subtracted.
Does Minnesota tax 401(k) and IRA withdrawals?
Taxed. 401(k) and IRA withdrawals are taxed as ordinary income at Minnesota's regular rates.
Is Minnesota a good state to retire for taxes?
For a single retiree with $30,000 Social Security, $20,000 pension, $20,000 401(k)/IRA, Minnesota charges about $1,214 in state income tax, ranking #44 of 51 (lowest tax first).
Related
Sources: house.mn.gov, revenue.state.mn.us, revenue.state.mn.us (2). Rules reviewed .