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Minnesota flag2026Rank #48

Minnesota Retirement Taxes

SS partially taxed · retirement income taxed · property 1% · sales 8.14%. Plan RMDs, Roth conversions, and estate tax before retiring in Minnesota.

By Sammy S. · Founder · AuthorUpdated for 2026

Social SecurityCompare

Minnesota retirement taxes snapshot

Still taxes some Social Security above AGI thresholds; other retirement income generally taxable; estate tax applies. Rank #48 on this site's retiree-friendliness score (#1 is most favorable).

Social Security

SS partially taxed

Federal rules still apply

Retirement income

Retirement income taxed

Pensions / IRA / 401(k)

Estate / inheritance

Estate tax

Exempt ~$3M

Retiree rank

#48

Lower score = more friendly

Compare Minnesota with another state

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Social Security, pensions/IRA, estate taxes, and supporting property/sales rates.

Does Minnesota tax Social Security?

SS partially taxed

SS subtraction phases out with AGI (about $86,410 single / $110,780 joint for full relief in 2026—indexed).

Federally, up to 85% of Social Security can be taxable based on combined income. State treatment is a separate layer on top of IRS rules.

How Minnesota taxes pensions, IRA, and 401(k) withdrawals

Retirement income taxed

Other retirement income generally taxed; SS partially taxed above thresholds.

Federal income tax on Social Security and retirement distributions can apply regardless of state rules.

Estate and inheritance taxes in Minnesota

Estate tax

Approx. exemption
$3M
Top estate rate
16%

Minnesota does not currently levy a state inheritance tax.

Federal estate tax may still apply above about $15M for 2026, regardless of state rules.

Property and sales taxes that affect retirees in Minnesota

Income-tax savings can be offset by higher housing or consumption taxes. These are statewide benchmarks—not the exact levy on a specific home or shopping basket.

Federal vs Minnesota retirement taxes

Living in Minnesota does not remove federal tax on taxable Social Security, traditional IRA/401(k) withdrawals, capital gains, or a taxable estate above the federal exemption. Minnesota rules sit on top of IRS rules.

Federal Social Security

Up to 85% of benefits may be taxable based on combined income—same framework in every state.

Minnesota Social Security

SS partially taxed

Minnesota withdrawals

Retirement income taxed

Death taxes

Estate tax

Before you retire in Minnesota

Confirm Social Security treatment

SS subtraction phases out with AGI (about $86,410 single / $110,780 joint for full relief in 2026—indexed).

Confirm pension and IRA rules

Other retirement income generally taxed; SS partially taxed above thresholds.

Estimate property tax on your home

Statewide effective property tax is about 1%. Check local homestead or senior relief.

Budget for sales tax

Combined average sales tax is about 8.14%. Necessities may be taxed differently.

Review estate or inheritance tax

Estate tax

Plan Roth conversions carefully

Conversions can raise Minnesota taxable income and, where relevant, Social Security state-tax thresholds.

How to read the Minnesota figures

Retiree rank

#48 on this site’s Social Security, retirement-income, and estate/inheritance score (#1 is most favorable).

Social Security badge

A planning label—not a guarantee for every AGI level or filing status.

Property & sales

Statewide benchmarks for cash-flow planning; your locality may differ.

Not modeled

Every local income tax, circuit breaker, homestead credit, or private pension nuance.

Related retirement planning tools

Social Security calculatorRMD calculatorRoth IRA calculator401(k) match

Related states by retiree-friendliness score

All state rankings→Compare any two states→

Minnesota retirement tax FAQs

SS subtraction phases out with AGI (about $86,410 single / $110,780 joint for full relief in 2026—indexed).

Other retirement income generally taxed; SS partially taxed above thresholds.

Yes — estate tax with an exemption near $3M and top rate about 16%.

Effective owner-occupied property tax is about 1%. Combined average sales tax is about 8.14%.

Minnesota ranks #48 on this site's retiree-friendliness score (#1 is most favorable), based on Social Security, retirement-income, and estate/inheritance treatment.

Still taxes some Social Security above AGI thresholds; other retirement income generally taxable; estate tax applies. Compare property tax, sales tax, healthcare costs, and housing before deciding.

Yes. Federal income tax on taxable Social Security, IRA/401(k) withdrawals, capital gains, and the federal estate tax framework still apply.

Use the pair selector on this page to compare Social Security treatment, retirement-income rules, estate/inheritance indicators, and supporting property and sales rates.

No. Federal taxability of Social Security depends on combined income under IRS rules, not on your state of residence. State tax is an additional layer.

A Roth conversion can increase taxable income in Minnesota and may affect Social Security state-tax thresholds where applicable. Model federal and state layers together before converting.

Confirm Social Security treatment, pension/IRA exclusions, property-tax homestead or senior relief, sales-tax rates on necessities, and whether Minnesota has an estate or inheritance tax. Local income taxes may also apply.

RMDs from traditional IRAs and 401(k)s are generally treated like other retirement withdrawals in Minnesota. Other retirement income generally taxed; SS partially taxed above thresholds.

Confirm current Minnesota return instructions and local rules. Rankings are educational planning aids.