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Legislature > House of Representatives > House Research > Taxes > Major State Aids & Taxes

Major State Aids & Taxes: Individual Income Tax

Program Description

Individual income tax is a tax imposed by the state upon (1) the income of Minnesota residents and (2) the income, derived from Minnesota sources, of nonresident individuals. The 2012 tax base is federal taxable income with minor modifications, including the addition of interest earned on bonds issued by non-Minnesota state and local governments, and subtractions for military pay, charitable contributions of nonitemizers, and certain dedependent education expenses. Rates applied in 2012 ranged from 5.35 percent to 7.85 percent. In 2012, Minnesota allowed a refundable dependent care credit of up to $720 for one child and $1,440 for two or more children, a refundable credit of up to $1,000 per child for K-12 education expenses, and a working family credit tied to the federal earned income credit. The maximum working family credit was $1,831.

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Tax Amount and Reporting

2012 Individual Income Tax: $8.4 billion ($7.9 billion from residents)

The total amount of the 2012 individual income tax returns is $8,361.0 million. The tax shown is net tax (after refunds) reported on the basis of the filer's county of residence. The state total includes $478.1 million of individual income taxes collected from returns filed by nonresident taxpayers. This report does not allocate the amount paid by nonresidents to counties, with a net amount of $7,883 million collected from Minnesota residents.

Individual income tax data was obtained from the Department of Revenue.

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Recent Law Changes

Minnesota has conformed with all major changes made in the federal tax code through tax year 2014, except that Minnesota does not allow the additional standard deduction amount for married filers for tax years 2011 to 2013. Instead, Minnesota taxpayers were required to add the additional deduction amount to state taxable income.

Effective in tax year 2013, Minnesota added a fourth rate of 9.85 percent. The new rate applies to taxable income in excess of $250,000 for married joint filers, $150,000 for single filers, and $200,000 for head of household filers. The income brackets are adjusted annually for inflation.

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Per Capita Maps

Individual income tax per capita, 2011 by county

*Minnesota residents only

Individual income tax per capita, 2011 by economic development region

*Minnesota residents only

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The Past Five Years of Individual Income Tax

The table below shows the distribution of individual income tax in thousands of dollars for the past five years for the state and economic development regions. The graph shows total dollars of individual income tax for that same time period in nominal (actual) and constant (inflation-adjusted) dollars.

Individual Income Tax, Residents Only: Tax Years 2008 to 2012
Nominal dollars, in thousands
2008 2009 2010 2011 2012 5-Yr. Chg. Aid
State $6,674,140 $5,933,287 $6,530,689 $7,018,451 $7,882,613 18%

Northern Regions
Northwest (1)
Headwaters (2)
Arrowhead (3)
West Central (4)
Five (5)
East Central (7E)
88,706
46,891
266,483
193,569
109,363
125,780
76,817
45,427
242,402
169,687
98,586
114,912
93,382
47,907
255,344
189,085
109,722
121,766
102,167
52,873
275,837
213,862
116,071
129,801
111,422
61,882
301,580
249,336
128,991
140,596
26
32
13
29
18
12

Southern Regions
Six East (6E)
Upper MN Valley (6W)
Central MN (7W)
Southwest (8)
Nine (9)
Southeastern MN (10)
110,838
52,275
395,073
101,779
210,606
506,687
98,582
39,584
361,913
92,919
186,768
470,640
104,120
41,333
380,546
100,709
200,843
522,162
117,186
50,232
417,275
117,387
224,030
541,881
132,688
54,779
476,172
136,832
251,841
593,631
20
5
21
34
20
17
Total Nonmetro $2,208,051 $1,998,236 $2,166,919 $2,358,602 $2,639,750 20%

Metro Region
Hennepin County
Ramsey County
Remaining Metro
2,180,059
589,838
1,696,193
1,842,641
530,568
1,561,841
2,108,599
565,115
1,690,057
2,225,620
611,488
1,822,741
2,557,860
676,927
2,008,076
17
15
18
Total Metro $4,466,089 $3,935,050 $4,363,770 $4,659,849 $5,242,863 17%

Statewide Income Tax, Residents Only

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March 2017

House Research Department  ♦  600 State Office Building, Saint Paul, MN  55155  ♦  House.Research@house.mn  ♦  651-296-6753