Minnesota vs Federal Tax Comparison
| Tax Type | MN State Rate | Federal Rate | Notes |
|---|---|---|---|
| Personal Income Tax | 5.35–9.85% | Federal: 10–37% | Combined fed+state applies |
| Corporate Income Tax | 9.8% | Federal: 21% | 9.8% flat — second-highest corp rate |
| State Sales Tax | 6.875% | No federal sales tax | Combined avg: 7.49% |
| Capital Gains Tax | 9.85% | Federal: 0–20% | Same as income tax |
About Minnesota Taxes
Among highest income and corporate tax states; strong social services.
Minnesota levies income tax at rates from 5.35–9.85%. The progressive bracket system means higher earners pay a larger percentage on income above each threshold.
Corporate activity in Minnesota faces a 9.8% state corporate tax rate. 9.8% flat — second-highest corp rate. Combined with the 21% federal corporate rate, businesses should plan accordingly.
Calculate Your Net Salary in Minnesota
See federal + MN state tax deductions, Social Security, Medicare, and take-home pay
Open US Salary CalculatorFrequently Asked Questions — Minnesota Taxes
What are Minnesota's income tax brackets for 2026?
Minnesota has a progressive income tax ranging from 5.35–9.85%. The top rate of 9.85% applies to the highest income bracket. Filers should check the current threshold amounts on the Minnesota Department of Revenue website.
What is the corporate income tax rate in Minnesota?
Minnesota imposes a corporate income tax at 9.8%. 9.8% flat — second-highest corp rate. Businesses should also account for federal corporate tax at 21% on top of the state rate.
What is the sales tax rate in Minnesota?
Minnesota has a state sales tax of 6.875%. When local city and county taxes are included, the average combined rate reaches 7.49%. Rates vary by locality so check the specific municipality for accurate figures.
How does Minnesota compare to neighboring states for taxes?
Minnesota's overall tax burden ranks near average among US states. The state levies income tax at up to 9.85%. For individuals evaluating relocation or remote work, comparing the full picture — income, sales, and property taxes — is essential. Use our US Salary Calculator to estimate your net income in Minnesota.
Are there any special tax incentives or exemptions in Minnesota?
Minnesota offers notable tax characteristics: Among highest income and corporate tax states; strong social services. Businesses and individuals should consult a qualified tax advisor to understand eligibility for available credits, deductions, and incentives specific to Minnesota.
Cost of Living in Minnesota
Tax rates are only part of the picture — explore city-level cost of living data:
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