Minnesota

Sales Tax

  • Statewide: 6.875%
  • Counties can levy an additional sales tax of no more than 2.0%.
  • Current average sales tax (with local taxes included): 7.391%
  • Common Exceptions at State Level:
    • Prescription Medicine: Exempt
    • Unprepared Foods: Exempt
    • Clothing: Exempt
    • Prepared foods: 11%
  • Gasoline Tax: 49.00 cents/gallon (Includes all state, local and federal taxes)
  • Diesel Fuel Tax: 55.00 cents/gallon (Includes all state, local and federal taxes)

 

Personal Income Tax

  • Personal Income Tax Rate Range: Four brackets from 5.35% to 9.85% (on income greater than $171,220)
  • Standard deduction: Single Filing Status: $12,900. Married Filing Jointly: $25,800. Dependents, 65 and over, or Blind: $1,700 ($1,350 for married filing jointly). Subject to phase-out.
  • Personal Exemption Allowance: Dependents: $4,450, subject to phase-out
  • Itemized Deductions Allowed?: Yes, subject to limitations
  • Retirement Income
    • Social Security: Can deduct $4,260 ($5,450 filing jointly) of federally taxable Social Security income, subject to phase-out.
    • IRAs: Taxable at ordinary income tax rates*
    • 401Ks/Defined contribution employer retirement plans: Taxable at ordinary income tax rates*
    • Private pensions: Taxable at ordinary income tax rates*
    • Public Pensions: Portion may be exempt based on income*
  • Military Pay
    • Active Duty Pay: Exempt
    • Military Retirement Pay: Exempt
    • Military Disability Pay: Exempt
    • VA Disability Dependency & Indemnity Compensation Benefits: Exempt
    • SBP/SSBP/RCSBP/RSFPP: Exempt
Income tax comments: *Taxpayers 65 and over may exempt up to $9,600 if income is less than $33,700 ($42,000 married filing jointly). Credit of $750 for past military service available if meet certain requirements.

 

Property Tax

  • Local municipalities average 1.12% of the property's assessed value.
  • Calculation of assessed value: 100% of fair market value
  • Relief programs for:
    • Regular Property Tax Refund: Tax credit up to $2,930 if income less than $119,790. 
    • Renters: Tax credit up to $2,280 if income less than $64,920.
    • Special Property Tax Refund: Tax credit up to $1,000 if meet property tax amount requirements.
    • Disabled/65 and over/Have Dependents: Additional tax credit may be available.
    • 65 and over: If income less than $60,000, tax over 3% of income can be deferred.
    • Disabled Veterans/Surviving Spouse/Primary Caregiver: Up to $300,000 of assessed value may be exempt if 100% service-connected disability; $150,000 if 70% service-connected disability.
    • Disabled: Up to $50,000 of assessed value may be reduced.
  • Personal Property Tax: Yes. Rates and exemptions vary.
  • Deferral programs are available.

 

Inheritance & Estate Taxes: Estates over $3 million are taxed at a rate between 13% and 16%. Some businesses and farms may qualify for a $5 million exemption. There is no inheritance tax.

 

Department of Revenue website: www.revenue.state.mn.us

More Financial Guidance From MOAA 

Premium and Life members can consult our financial staff for education and consumer advice.

 

Looking to get more out of your membership? MOAA has more than 400 chapters around the country. Get involved in your community by finding the one closest to you and joining today! 


Financial Resources Join a Chapter

Search