Individual Income Tax
Tax Base:
Federal taxable income plus or minus state modifications.
Rates and Taxable Income Brackets*:
Tax Year 2006 5.35% up to 7.05% 7.85% over
===================================================
Married Joint $29,980 $29,981-$119,100 $119,100
Married Sep. $14,990 $14,991-$ 59,550 $ 59,550
Single $20,510 $20,511-$ 67,360 $ 67,360
Head of Household $25,250 $25,251-$101,450 $101,450
Tax Year 2005 5.35% up to 7.05% 7.85% over
===================================================
Married Joint $29,070 $29,071-$115,510 $115,510
Married Sep. $14,540 $14,541-$ 57,760 $ 57,760
Single $19,890 $19,891-$ 65,330 $ 65,330
Head of Household $24,490 $24,491-$ 98,390 $ 98,390
Tax Year 2004 5.35% up to 7.05% 7.85% over
===================================================
Married Joint $28,420 $28,421-$112,910 $112,910
Married Sep. $14,210 $14,211-$ 56,460 $ 56,460
Single $19,440 $19,441-$ 63,860 $ 63,860
Head of Household $23,940 $23,941-$ 96,180 $ 96,180
Tax Year 2003 5.35% up to 7.05% 7.85% over
===================================================
Married Joint $27,780 $27,781-$110,390 $110,390
Married Sep. $13,890 $13,891-$ 55,200 $ 55,200
Single $19,010 $19,011-$ 62,440 $ 62,440
Head of Household $23,400 $23,401-$ 94,030 $ 94,030
Tax Year 2002 5.35% up to 7.05% 7.85% over
===================================================
Married Joint $27,350 $27,351-$108,660 $108,660
Married Sep. $13,680 $13,681-$ 54,330 $ 54,330
Single $18,710 $18,711-$ 61,460 $ 61,460
Head of Household $23,040 $23,041-$ 92,560 $ 92,560
Tax Year 2001 5.35% up to 7.05% 7.85% over
===================================================
Married Joint $26,480 $26,481-$105,200 $105,200
Married Sep. $13,240 $13,241-$ 52,600 $ 52,600
Single $18,120 $18,121-$ 59,500 $ 59,500
Head of Household $22,300 $22,301-$ 89,610 $ 89,610
Tax Year 2000** 5.35% up to 7.05% 7.85% over
===================================================
Married Joint $25,680 $25,681-$102,030 $102,030
Married Sep. $12,840 $12,841-$ 51,015 $ 51,015
Single $17,570 $17,571-$ 57,710 $ 57,710
Head of Household $21,630 $21,631-$ 86,910 $ 86,910
Tax Year 1999** 5.5% up to 7.25% 8% over
===================================================
Married Joint $25,220 $25,221-$100,200 $100,200
Married Sep. $12,610 $12,611-$ 50,100 $ 50,100
Single $17,250 $17,251-$ 56,680 $ 56,680
Head of Household $21,240 $21,241-$ 85,350 $ 85,350
Tax Year 1998 6% up to 8% 8.5% over
===================================================
Married Joint $24,800 $24,801-$ 98,540 $98,540
Married Sep. $12,400 $12,401-$ 49,270 $49,270
Single $16,960 $16,960-$ 55,730 $55,730
Head of Household $20,890 $20,891-$ 83,930 $83,930
* The income brackets are adjusted annually for inflation.
**The rates were lowered as part of the 1999 and 2000 legislative sessions.
Computation:
Federal taxable income,
plus: Minnesota Additions (non-MN state and municipal bond
interest; itemized deduction for state income taxes; capital gains portion of
a lump sum distribution)
minus: Minnesota Subtractions (US bond interest; state income
tax refunds; dependent education expenses for itemizers only; income of elderly
and disabled up to income limits; payments by the self-employed for health insurance
not deducted federally; railroad retirement income; gains on farm sales by insolvent
farmers; an exemption for purchasers of homesteads in designated zones of the
metro area under the Metropolitan Livable Communities Act of 1995)
equals: Minnesota taxable income
times: graduated rates (5.5%, 7.25%, and 8%; see above)
equals: Minnesota gross tax
plus: alternative minimum tax (6.5% of alternative minimum
taxable income) in excess of the regular tax
minus: nonrefundable credits (credit for income tax paid to
other states; alternative minimum tax carryover credit, marriage penalty credit)
equals: Minnesota income tax
minus: refundable credits (dependent care credit; working family
credit, education credit)
equals: net individual income tax payable.
Special Provisions:
- Taxpayer may assign $5 from general fund to political parties or campaign funds.
- Taxpayers may contribute $1 or more to the MN Nongame Wildlife Management Account by reducing their refund or increasing their liability.
- Reciprocity agreements exempt North Dakota, Wisconsin, and Michigan residents from filing MN returns on wage and personal service income earned in this state. The reciprocity agreement with Wisconsin includes a reimbursement provision. Each year Wisconsin reimburses Minnesota for the revenue lost due to reciprocity.
- In lieu of the regular income tax, nonresident entertainers pay a tax equal to 2% of compensation received for entertainment performed in Minnesota.
- In 1998 and 1999 only, property tax rebate calculated as 20% of a homeowner's property tax bill (capped at $1,500 for 1999, no cap for 1998).
Revenue Collections:
Income Tax Reciprocity
================================
Fiscal Year 1993 $3,471,383,000 $24,127,000
Fiscal Year 1994 $3,540,019,000 $26,893,000
Fiscal Year 1995 $3,753,259,000 $26,996,000
Fiscal Year 1996 $4,135,332,000 $28,504,000
Fiscal Year 1997 $4,784,801,000 $31,887,000
Fiscal Year 1998 $4,746,569,000 $37,872,000
Fiscal Year 1999 $5,305,177,000 $39,367,000
Fiscal Year 2000* $5,556,371,000 $46,475,000
Fiscal Year 2001* $5,915,391,000 $42,610,000
Fiscal Year 2002 $5,443,356,000 $47,899,000
Fiscal Year 2003 $5,371,829,000 $49,010,000
Fiscal Year 2004 $5,709,585,000 $46,242,000
Fiscal Year 2005 $6,341,164,000 $49,850,000
*The rates were lowered as part of the 1999 and 2000 legislative sessions.
History:
Enacted in 1933 at graduated rates from 1% to 5%.
This information was taken from the Minnesota Department of Revenue Tax Research Division's "Tax Handbook," 2004 edition.