Minnesota Social Security Tax Guide 2026

Direct Answer

Does Minnesota Tax Social Security Benefits?

Yes, Minnesota is one of a limited number of states that may tax Social Security benefits at the state level. However, Minnesota does not automatically tax every recipient. The state offers a Social Security Benefit Subtraction that can reduce or eliminate the portion of benefits subject to Minnesota income tax, depending on your filing status and income.

The subtraction is claimed on Schedule M1M when filing your Minnesota state return. If your income falls below certain thresholds, you may subtract 100% of the taxable Social Security benefits included in your federal adjusted gross income. Above those thresholds, the subtraction is gradually reduced through a phaseout calculation.

Sources: Minnesota Department of Revenue, Social Security Benefit Subtraction; Minnesota Department of Revenue, Tax Year 2026 Inflation-Adjusted Amounts. As of September 14, 2026.

2026 Thresholds

2026 Minnesota Social Security Subtraction Income Thresholds

For the 2026 tax year, Minnesota's inflation-adjusted thresholds determine whether you can subtract all, part, or none of your federally taxable Social Security benefits. Below the threshold, the full subtraction applies. Above it, the subtraction is reduced.

Filing Status	2025 Threshold	2026 Threshold	Change
Married Filing Jointly / Qualifying Surviving Spouse	$108,320	$110,780	+$2,460
Single or Head of Household	$84,490	$86,410	+$1,920
Married Filing Separately	$54,160	$55,390	+$1,230

Source: Minnesota Department of Revenue, Tax Year 2026 Inflation-Adjusted Amounts. As of September 14, 2026.

Phaseout Calculation

How the Subtraction Phaseout Works

If your Minnesota AGI exceeds the threshold for your filing status, the subtraction is reduced by 10% for each $4,000 (or fraction of $4,000) above the threshold. For married taxpayers filing separately, the reduction is 10% for each $2,000 above the threshold.

For example, a married couple filing jointly with $118,780 in AGI would be $8,000 above the 2026 threshold of $110,780. That is two full $4,000 increments, so the subtraction is reduced by 20%. They could subtract 80% of their federally taxable Social Security benefits from Minnesota taxable income.

At approximately $40,000 above the threshold, the subtraction reaches zero, meaning all federally taxable Social Security benefits would be included in Minnesota taxable income. Individual results vary based on filing status, income sources, and benefit amounts.

Quick Phaseout Reference (2026)

MFJ / QSS: $110,780 or below

Subtract 100% of taxable benefits

$110,781 to ~$150,780

Subtraction reduced by 10% per $4,000 above threshold

Above ~$150,780

No subtraction available; benefits taxed at MN rates

Approximate ranges for married filing jointly. Exact calculations depend on your specific AGI and benefit amounts.

Two Calculation Methods

Simplified Method vs Alternative Method

Minnesota offers two ways to calculate your Social Security subtraction. You may use whichever method produces the larger subtraction, but you cannot combine them.

Feature	Simplified Method	Alternative Method
Basis	Minnesota AGI	Provisional income (gross income plus tax-exempt interest plus half of Social Security)
2026 MFJ Threshold	$110,780	$88,630
2026 Single / HOH Threshold	$86,410	$69,250
Max Subtraction (MFJ)	Up to 100% of taxable benefits	$5,840
Max Subtraction (Single/HOH)	Up to 100% of taxable benefits	$4,560
Best For	Taxpayers with moderate AGI below the threshold	Taxpayers with higher AGI but lower provisional income

Source: Minnesota Department of Revenue, Social Security Benefit Subtraction. As of September 14, 2026.

Planning Strategies

Strategies That May Reduce Your Minnesota Social Security Tax

Because Minnesota's subtraction is tied to your AGI, strategies that manage income timing and sources may help preserve more of the subtraction. These approaches involve trade-offs and depend on your individual circumstances.

1

Manage Withdrawal Timing From Retirement Accounts

Coordinating when you take distributions from taxable accounts, IRAs, and other retirement income sources may help keep your AGI below the subtraction threshold in a given year. However, delaying withdrawals can create larger tax obligations in future years, so timing decisions should be evaluated multi-year.

2

Consider Roth Conversions in Lower-Income Years

Converting traditional IRA funds to a Roth IRA in years when your income is lower may reduce future required minimum distributions that would otherwise increase your AGI and potentially phase out your Social Security subtraction. Roth conversions are taxable events in the year of conversion, so the immediate tax cost should be weighed against the long-term benefit.

3

Coordinate Income With Your Spouse

For married couples, balancing income between spouses may help manage household AGI relative to the married filing jointly threshold. Filing status decisions can affect both the threshold amount and the phaseout rate, so these should be reviewed annually.

4

Evaluate Both Subtraction Methods Each Year

Because the simplified and alternative methods use different income definitions and thresholds, the better choice can change from year to year as your income sources shift. Running both calculations annually helps ensure you claim the larger subtraction.

State Comparison

How Minnesota Compares to Other States

Minnesota is one of a smaller group of states that may tax Social Security benefits, though its subtraction provides relief for many retirees. By contrast, the majority of states either exempt Social Security entirely or have no state income tax at all.

State Category	Treatment of Social Security
No state income tax (e.g., TX, FL, NV)	Social Security not taxed at state level
States that exempt Social Security (majority)	Full exemption from state taxation
Minnesota	Partial taxation with income-based subtraction
States that tax based on federal rules	Tax whatever portion is federally taxable

State tax rules change frequently. Always verify current rules with your state's revenue department or a qualified tax professional.

Our Approach

Coordinated Tax and Retirement Planning

At New Horizons Boutique Financial Services, we build retirement strategies that coordinate tax planning with income planning. Our team, including advisors with FINRA Series 7, 63, 65, and 66 registrations, an MBA, and a B.S. in Economics from the University of Minnesota, works directly with clients to evaluate how Minnesota's Social Security subtraction fits into a broader retirement income plan.

Because the subtraction is tied to AGI, decisions about which accounts to withdraw from, when to take distributions, and how to coordinate income sources all affect whether you can claim the full subtraction. Our strategy-first approach examines these factors before making any recommendations.

For a broader view of how Minnesota taxes different types of retirement income, including pensions, 401(k) distributions, and IRAs, visit our Minnesota State Taxes on Retirement Income guide. You can also learn about Minnesota's Rule of 90 for public pension employees or how Minnesota taxes military retirement.

What Our Planning Addresses

1 Social Security subtraction eligibility and method selection
2 Retirement account withdrawal timing to manage AGI
3 Coordination of pension, IRA, and Social Security income
4 Multi-year tax projections for retirement transition years

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FAQ

Frequently Asked Questions About Minnesota Social Security Tax

How Much Will My Social Security Be Taxed in Minnesota?

The amount depends on your filing status and Minnesota AGI. If your AGI is at or below the 2026 threshold ($110,780 for married filing jointly, $86,410 for single or head of household, $55,390 for married filing separately), you may subtract 100% of your federally taxable Social Security benefits from Minnesota taxable income. Above the threshold, the subtraction is reduced by 10% per $4,000 of additional AGI. You can also use the alternative method, which bases eligibility on provisional income rather than AGI.

Do You Have to Pay State Tax on Social Security in Minnesota?

You may owe state tax on a portion of your Social Security benefits if your income exceeds the subtraction threshold for your filing status. Many Minnesota retirees with moderate incomes pay little or no state tax on their benefits because the subtraction eliminates or significantly reduces the taxable portion. Retirees with higher income from pensions, IRA distributions, or other sources are more likely to have some benefits subject to Minnesota income tax.

Will Minnesota Have a Tax on Social Security Benefits in 2026?

Yes, Minnesota's Social Security Benefit Subtraction rules remain in effect for the 2026 tax year. The 2026 income thresholds have been adjusted upward for inflation: $110,780 for married filing jointly, $86,410 for single or head of household, and $55,390 for married filing separately. The same phaseout structure applies. Legislative proposals to change how Minnesota taxes Social Security have been discussed in recent sessions, so rules may be subject to future legislative changes.

What States Do Not Tax Social Security for Retirees?

The majority of U.S. states do not tax Social Security benefits. States with no state income tax, such as Texas, Florida, and Nevada, do not tax Social Security. Many states with income taxes also fully exempt Social Security benefits. Minnesota is among a smaller group of states that may tax a portion of benefits, though its subtraction provides relief for many retirees. State tax rules change frequently, so verifying current rules with your state's revenue department is recommended.

How Do Federal and Minnesota Social Security Taxation Interact?

At the federal level, a portion of Social Security benefits may be taxable depending on your combined income, which includes adjusted gross income, tax-exempt interest, and half of your Social Security benefits. Up to 85% of benefits can be federally taxable for higher-income recipients. Minnesota's subtraction applies to the benefits that are already included in your federal AGI. If your benefits are not taxable at the federal level, they are generally not taxable in Minnesota either.

Build Your Minnesota Retirement Tax Strategy

Understanding how Minnesota taxes Social Security is one piece of a comprehensive retirement income plan. Our team can help you evaluate your subtraction eligibility, coordinate withdrawal timing, and build a tax-aware retirement strategy designed for your goals.