Minnesota taxes and cost of living (2026)
Minnesota has a graduated income tax from 5.35% to 9.85%. A $100,000 salary is worth about $67,271 a year in national buying power after every tax and Minnesota's prices, #36 of 51 (the state average is $70,397). Retiring on $50,000 a year takes about $1.30M, #33 lowest.
- State income tax
- 5.3%–9.85%
- Sales tax (avg. combined)
- 8.14%
- Property tax (effective)
- 1.02%
- Cost of living
- 98.6
- US = 100
- Social Security taxed?
- No
- Median home
- $345K
Take-home pay in Minnesota
Single filer, 10% of salary to a pre-tax 401(k), standard deduction, renting. All taxes include estimated sales tax.
| Salary | Federal | FICA | State + local | All-in tax rate | Take-home | In US dollars |
|---|---|---|---|---|---|---|
| $50,000 | $3,220 | $3,825 | $1,809 | 19.0% | $36,146 | $36,651 |
| $75,000 | $6,020 | $5,738 | $3,397 | 21.5% | $52,346 | $53,078 |
| $100,000 | $10,970 | $7,650 | $5,037 | 24.9% | $66,343 | $67,271 |
| $150,000 | $21,134 | $11,475 | $8,424 | 28.6% | $93,967 | $95,280 |
| $250,000 | $43,304 | $15,514 | $15,772 | 31.1% | $150,410 | $152,513 |
What it takes to retire in Minnesota
Married couple, age 60, withdrawals 60% from 401(k)/IRA, 20% Roth, 20% brokerage, no Social Security yet, renting. Spending at US-average prices.
| Spending | At MN prices | Income taxes | All taxes | FI number |
|---|---|---|---|---|
| $40,000 | $39,448 | $0 | $1,028 | $986.2K |
| $60,000 | $59,173 | $1,007 | $2,549 | $1.50M |
| $80,000 | $78,897 | $3,137 | $5,192 | $2.05M |
| $120,000 | $118,345 | $7,959 | $11,042 | $3.16M |
Minnesota tax rules at a glance
- Income tax: Minnesota has a graduated income tax from 5.35% to 9.85%. 2026 brackets indexed 2.369%. Minnesota's own standard deduction is $15,300 / $30,600, reduced for high incomes (phase-out starts at $244,400 AGI; 80% limit). No personal exemption for the filer; $5,300 per dependent. Net investment income tax: an extra 1% on net investment income over $1M.
- Payroll: MN Paid Leave: 0.44% of wages up to $184,500.
- Local income tax: No local income taxes.
- Social Security: Not taxed. Fully subtracted when income is at or below about $110,780 married / $86,410 single (2026), reduced above that (modeled as exempt).
- Retirement income: No general exclusion. New public pension subtraction up to $13,850 single / $27,690 MFJ (2026), phased out above the same AGI thresholds. Military retirement subtraction is also available. Private pensions, IRA and 401(k) are taxable.
- Capital gains: Taxed as ordinary income; plus the 1% NIIT on net investment income over $1M.
- Sales tax: 6.88% state rate, 8.14% average with local taxes; groceries exempt.
Compare Minnesota with
Frequently asked questions
Does Minnesota have a state income tax?
Minnesota has a graduated income tax from 5.35% to 9.85%. 2026 brackets indexed 2.369%. Minnesota's own standard deduction is $15,300 / $30,600, reduced for high incomes (phase-out starts at $244,400 AGI; 80% limit). No personal exemption for the filer; $5,300 per dependent. Net investment income tax: an extra 1% on net investment income over $1M.
How much is $100,000 after taxes in Minnesota?
A single filer earning $100,000 who puts $10,000 in a 401(k) takes home about $66,343 after federal, state and local income taxes and payroll taxes, an all-in effective rate of 24.9% including estimated sales tax.
Does Minnesota tax Social Security?
No. Minnesota does not tax Social Security benefits. Fully subtracted when income is at or below about $110,780 married / $86,410 single (2026), reduced above that (modeled as exempt).
How much do you need to retire in Minnesota?
To spend $50,000 a year (at US-average prices) with withdrawals mostly from a 401(k)/IRA, you'd need about $1.30M in Minnesota using the 4% rule, after its cost of living and taxes.
Is Minnesota expensive to live in?
Minnesota's cost of living index is 98.6, where the US average is 100 (BEA Regional Price Parities, 2024). The median home is worth about $344,600 and median rent is $1,291 a month.
How this is calculated
- Income taxes use 2026 federal and state brackets, standard deductions and personal exemptions or credits. No itemized deductions or other credits. Local income taxes use a typical statewide rate (for example, Maryland's county taxes or New York City's); many places have none.
- Payroll taxes include Social Security (6.2% up to the wage base), Medicare, and employee-paid state programs such as California SDI or Washington's paid leave premium. A married household salary is treated as two equal earners for payroll-tax caps.
- Cost of living uses the Bureau of Economic Analysis's Regional Price Parities (2024), where the US average is 100. Spending you enter at national prices is scaled by each state's index.
- Sales tax is estimated as the average combined state and local rate on about a third of spending (more where groceries are taxed). It is shown for context but not added to costs, because the price parities already include it. Property tax applies the state's effective rate to its median home value (Census ACS 2024) if you own.
- Retirement solves for the withdrawal that covers your spending plus the taxes it triggers, using each state's treatment of Social Security, retirement-account withdrawals and capital gains, then multiplies by 25 (a 4% withdrawal rate).
- Years to FI starts from zero, adds what you save each year in that state, and grows it at a 5% real return until it reaches that state's FI number.
Estimates for comparison, not tax advice. Your actual taxes depend on deductions, credits, where in the state you live and more. Sources: BEA Regional Price Parities, Census ACS, state sales tax rates, IRS, state revenue departments (per state).