ThereĪre at least three ways to measure the extent of Social Security taxation in the state: The extent to which Social Security benefits are subject to Minnesota income tax depends on the measure used. “flows through” to the taxpayer’s Minnesota income tax, and an additional Minnesota-specific subtraction availableįor a portion of the income that is taxable federally. Separate tax policies that result in Social Security benefits being nontaxable-an exclusion in federal law that Exemption from Minnesota Income TaxĪ taxpayer’s Social Security benefits are fully or partially exempt from Minnesota’s income tax. It additionally includes brief historical context on the federal exclusionĪnd state subtraction. This webpage describes how the federal exclusion and state subtraction are calculated, shows the income levelsĪt which taxpayers are subject to taxes on Social Security benefits, and provides a survey of the tax treatment Receiving Social Security benefits pay tax on their benefits. Overall, approximately 33 percent of Social Security benefits paid to Minnesota residents are subject to tax,īut approximately 62 percent of resident returns with Social Security benefits paid tax on that income.Īfter accounting for residents who do not file state tax returns, about 45 percent of Minnesota households Is the result of two separate policies-the federal exclusion from gross income for a portion of Social Securityīenefits, and the Minnesota Social Security Subtraction. Only a portion of Social Security benefits is subject to Minnesota income taxes.

2021 idaho income tax brackets