Does Minnesota tax retirement income?

Does Minnesota tax Social Security?

Social Security is fully exempt below $86,410 of AGI ($110,780 joint) in 2026; above that the exemption phases out.

Minnesota subtracts 100% of taxable Social Security when AGI is at or below $86,410 (single or head of household), $110,780 (joint or surviving spouse) or $55,390 (married filing separately) for 2026 (2025: $84,490 / $108,320 / $54,160). The subtraction shrinks by 10% for each $4,000 of AGI over the threshold ($2,000 if married filing separately), so it is gone once AGI is $40,000 over ($20,000 if separate). An older alternative method (up to $5,840 joint / $4,560 single, not indexed) rarely helps now.

Your federal return is a separate question — see how much of your benefit the IRS taxes with the taxable Social Security calculator.

Are pensions taxed in Minnesota?

Private pensions are fully taxed; public pensions too, except for service that didn’t earn Social Security credit.

The qualified public pension subtraction (Schedule M1QPEN) applies only to pensions for government service not covered by Social Security: up to $13,850 single, head of household or separate and $27,690 joint for 2026, phased out at the same incomes as the Social Security subtraction.

Public vs. private pensions: Private pensions: fully taxed. Public pensions: taxed unless the service was not covered by Social Security.

Are IRA and 401(k) withdrawals taxed in Minnesota?

IRA and 401(k) withdrawals are fully taxable at regular rates (5.35% to 9.85%).

There is no age-based exclusion.

Required minimum distributions (RMDs) are IRA and 401(k) withdrawals, so the same rules apply. Estimate your RMD.

Is military retirement pay taxed in Minnesota?

Military pensions and retirement pay, including reserve retirement and Survivor Benefit Plan payments, can be subtracted to the extent federally taxable (not combined with the Credit for Past Military Service).

What is Minnesota’s income tax rate?

4 brackets, topping out at 9.85%.

Four brackets for 2026: 5.35%, 6.8%, 7.85% and 9.85%; the top rate starts above $203,150 single and $337,930 joint. A separate 1% tax applies to net investment income over $1 million.

Standard deduction and exemptions

2026 standard deduction: $15,300 single or married filing separately, $23,000 head of household, $30,600 joint, plus $2,000 (single or head of household) or $1,600 (married) for 65+ or blind; both are limited at high incomes. Dependent exemption: $5,300. The federal $6,000 senior deduction does not reduce Minnesota tax, and Minnesota did not add its own version in 2026.

What tax breaks do seniors get in Minnesota?

The extra standard deduction at 65+, the Social Security subtraction, the M1R subtraction for people 65+ or disabled with low incomes, the full subtraction of Railroad Retirement benefits, and the property tax refund.

What changed for 2026?

The income-limited Social Security subtraction dates from 2023 (thresholds indexed). The 2026 omnibus tax law (Laws 2026, Ch. 128) updated federal conformity but made no Social Security, pension or senior change. Bills for a full Social Security exemption were not enacted. 2027 thresholds come out in December.

Official inflation-adjusted 2026 amounts were published in December 2025.