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Minnesota Personal Income Tax Laws

It doesn't matter how many times we've done it, or even how big our return will be -- filing our income taxes every year can be a royal pain. Even if you're using a computer program or hiring an accountant to do your taxes, you may be wondering what laws the North Star State has relating to your income taxes. And how do those laws work with the federal income tax statutes? The tax code can seem impenetrable, so here is a brief introduction to Minnesota personal income tax laws.

Income Tax in Minnesota

States income taxes go to pay for everything from schools to police to roads, as well as other vital state services. Minnesota's personal income tax laws employ a three-tiered system which charges varying tax rates depending on your annual income. And that's just for individuals -- some corporations, partnerships, and trusts might have to pay additional taxes on their income. Minnesota's personal income tax laws are highlighted in the following chart.

Code Section

MN Statutes §290.01, et seq.

Who Is Required to File

Resident and nonresident individuals, estates and trusts

Rate

First $28,420, 5.35%; Next $84,489, 7.05%; Over $112,911, 7.85%

Federal Income Tax Deductible

No

Federal Income Used as Basis

Yes

On top of Minnesota's income taxes, you may also be subject to consumer tax laws as well as federal tax laws. Although some states choose not to charge personal income taxes, basic tax law allows both the federal government and the states to tax both unearned and earned income. Earned income refers your salary, wages, tips, commissions, bonuses, unemployment benefits, and sick pay, while unearned income comes from sources like interest, dividends, profits from asset sales, business and farm income, rent income, royalties, gambling winnings, and alimony.

Federal taxation is collected according to the Internal Revenue Code (IRC) and handled by the Internal Revenue Service (IRS). You can find IRS forms and publications online. Many state income tax codes are based on the federal code. However, there may be important distinctions in each state that you should be aware of before paying your taxes. Many states make their state tax forms available online, and may also offer taxpayer assistance programs if you would like help filing your state and federal income tax returns.

Minnesota Personal Income Tax Laws: Related Resources

The tax code can be one of the most confusing areas of law. You can contact a Minnesota tax law attorney if you would like legal assistance with a tax matter. You can also find additional information and resources in FindLaw's Tax Law center.

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