Does Minnesota tax Social Security benefits?

Minnesota partially taxes Social Security. A subtraction fully exempts benefits for filers with income below set thresholds (about 82,190 dollars for single and 105,380 dollars for joint filers in 2024), then phases the exemption out for higher incomes.

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

Yes. Pension payments, traditional IRA distributions, and 401(k) withdrawals are taxed as ordinary income at Minnesota's graduated brackets of 5.35% to 9.85%, just like wages. Roth withdrawals are generally not taxable.

How does the Social Security subtraction work?

If your income is under the threshold, your federally taxable Social Security benefits are fully subtracted from Minnesota income. Above the threshold the subtraction shrinks by a percentage of the excess until it is fully phased out at higher incomes.

Is Minnesota a tax-friendly state for retirees?

It is moderately friendly. The expanded Social Security subtraction protects most middle-income retirees, but pension and traditional retirement-account income is fully taxable, so higher-income retirees can still owe meaningful state tax.

How accurate is this estimate?

It approximates the 2024 rules with simplified subtraction thresholds and a linear phase-out. Actual tax depends on your federal taxable Social Security amount, the standard deduction, and credits. Use it as a guide, not a filing tool.

Minnesota Retirement Income Tax Calculator

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Minnesota’s retirement tax picture has two parts: Social Security gets a generous subtraction that fully exempts benefits for most middle-income retirees, while pensions and traditional retirement-account withdrawals are taxed as ordinary income. This calculator separates the two so you can see exactly what Minnesota will tax.

How it works

The calculation reflects Minnesota’s 2024 retirement rules:

Total your retirement income. Enter Social Security benefits, pension income, and IRA or 401(k) withdrawals separately.
Apply the Social Security subtraction. If your income is below the threshold for your filing status, your Social Security is fully subtracted; above it, the subtraction phases out linearly until it disappears.
Tax the rest. Pension and traditional withdrawal income — plus any non-subtracted Social Security — is taxed at Minnesota’s graduated brackets after the standard deduction.

The taxable base is pension + withdrawals + (Social Security − SS_subtraction), run through the 5.35% to 9.85% brackets.

Tips and example

A married couple receiving $30,000 in Social Security, a $25,000 pension, and $15,000 in 401(k) withdrawals has total income of $70,000 — under the joint threshold, so the full $30,000 of Social Security is subtracted. The remaining $40,000 of pension and withdrawals, after the joint standard deduction, leaves about $10,850 taxable, producing roughly $580 of Minnesota tax.

Roth distributions are generally not taxed, and converting to Roth in lower-income years can reduce future Minnesota tax. This is a simplified estimate; verify your federally taxable Social Security amount on your return.