Overview
Minnesota uses a progressive income tax with multiple brackets and relatively high top rates. The state has its own withholding form and maintains reciprocal tax agreements with Michigan and North Dakota.
State Income Tax (SIT)
Minnesota’s progressive income tax uses multiple brackets. For 2026, each personal allowance is worth $5,300 and the supplemental rate is 6.25%. Employees complete Form W-4MN with their filing status and total allowances. There is also a nonresident withholding threshold of $15,300—nonresidents earning less than this amount in Minnesota may be exempt.
| Tax Structure | Progressive with multiple brackets |
| State Withholding Form | Form W-4MN |
| Filing Statuses | S, M, MH |
| Allowance Value | $5,300 per allowance |
| Supplemental Rate | 6.25% |
| Reciprocity | Michigan and North Dakota |
Supplemental Wages
Minnesota supports the following supplemental calculation methods. When using the flat method, the supplemental rate is 6.25%.
Employer State Unemployment Tax (SUTA)
Your assigned SUTA rate will be based on your company’s experience with unemployment claims. New employers typically start at the default rate of 1.0%.
| Tax Type | Employer-paid only |
| Default New Employer Rate | 1.0% |
| Rate Assignment | Experience-rated; assigned annually by the state |
Other Taxes & Obligations
Minnesota does not currently impose significant additional state-level payroll taxes beyond SIT and SUTA. This keeps payroll relatively streamlined compared to states with multiple layers of tax obligations.
Disclaimer: This content is provided for general informational purposes only and does not constitute legal, tax, or accounting advice. Netchex does not provide tax or legal guidance and makes no representations regarding the accuracy or applicability of this information. Laws and regulations may change. The information on this page reflects payroll tax guidelines as of March 2026. For the most current requirements, please refer to:
Official reference: Minnesota Department of Revenue
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