Legislature House of Representatives House Research Income Taxes: Individual & Corporate
Minnesota's Elderly Exclusion
What is the elderly exclusion and who can claim it?
Minnesota's elderly exclusion allows low-income taxpayers who are over age 65 or disabled
to exclude a certain amount of income, regardless of the source, from taxable income.
How is the exclusion calculated?
The exclusion is calculated using a base amount and an income-based phase-out. Tax-exempt Social Security,
railroad retirement, and nontaxable veterans' pension benefits are subtracted from the base amount.
The base amount is $12,000 for married joint taxpayers, and $9,600 for single filers. After subtracting tax-exempt
Social Security and railroad retirement benefits, the exclusion is phased out at a 50 percent rate for
taxpayers with incomes over a fixed threshold.
The following table summarizes the base amounts, the phaseout thresholds, and the maximum
incomes at which filers are eligible for the exclusion.
||Maximum income eligible
|Married joint, both over 65 or disabled
|Married joint, one over 65 or disabled
|Single, head of household, and qualifying widow/widower
How much does the elderly exclusion cost the state?
The Minnesota Department of Revenue's Tax Expenditure Budget for
2016-2019 shows an
estimated cost of $0.7 million in foregone tax revenues in fiscal year 2016 for the elderly