Minnesota

Tax Rate Range: Low - 5.35%; High - 7.85%
Income Brackets: * Lowest - $20,510; Highest - $67,361
Number of Brackets: 3
Personal Exemptions: ** Single - $3,200; Married - $6,400; Dependents - $3,200
Standard Deduction: Single - $4,740; Married filing jointly - $9,500
Medical/Dental Deduction: Federal amount
Federal Income Tax Deduction: None
Retirement Income Taxes: Social Security income is taxed by Minnesota to the same extent it is on your federal return. If your only income is Social Security, you would not be required to file an income tax return. Pensions, including federal pensions, received while a Minnesota resident are taxable by Minnesota regardless of where your pension was earned. Railroad retirement benefits paid to you by the Railroad Retirement Board are not taxed by Minnesota. If these benefits are included in your federal taxable income, you may subtract them from your taxable income. Taxpayers 65 and older may subtract some income if federal adjusted gross income is under certain limits.
Retired Military Pay: Pensions are taxable.
Military Disability Retired Pay: Disability Portion - Length of Service Pay; Member on September 24, 1975 - No tax; Not Member on September 24, 1975 - Taxed, unless combat incurred. Retired Pay - Based solely on disability: Member on September 24, 1975 - No tax; Not Member on September 24, 1975 - Taxed, unless all pay based on disability and disability resulted from armed conflict, extra-hazardous service, simulated war, or an instrumentality of war.

State Tax Software

VA Disability Dependency and Indemnity Compensation: Not subject to federal or state taxes
Military SBP/SSBP/RCSBP/RSFPP: Generally subject to state taxes for those states with income tax. Check with state department of revenue office.
* The tax brackets reported are for single taxpayers. For married taxpayers filing jointly, the same rates apply to income brackets ranging from $31,150 to $123,751 (2007).
** Minnesota allows personal exemption or standard deductions as provided in the Internal Revenue Code.

Sales Taxes

State Sales Tax: 6.5% (food, clothing, prescription and non-prescription drugs exempt); Liquor and beer taxed at 9.15%. A few cities and counties also add a sales tax which can be as high as 1.0%.
Gasoline Tax: 22 cents/gallon
Diesel Fuel Tax: 22 cents/gallon
Cigarette Tax: $1.49/pack of 20

Property Taxes

There is a Senior Citizen Property Tax Deferral Program allows people 65 years of age or older, whose household incomes are $60,000 or less, to defer a portion of their property tax on their home. This deferral program has two primary advantages for senior citizens. It limits the maximum amount of property tax you pay to three percent of your total household income, and it provides predictability. The amount of tax you pay will not change for as long as you participate in this program. It is not a tax forgiveness program. It is a low interest loan from the state. The deferred tax is paid by the state to your county. Interest will be charged on this loan. The interest rate will be adjusted annually, but will never exceed five percent. A lien will attach to your property.
Minnesota has two property tax refund programs for homeowners: the regular property tax refund, and the special property tax refund. You may be eligible for one or both, depending on your income and the size of your property tax bill.

Estate Taxes

There is no inheritance tax and a limited estate tax related to federal estate tax collection.
For further information, visit the Minnesota Department of Revenue site.