Updated July 25, 2026. Quick answer (2026): If you are weighing a move out of Minnesota in retirement, two things change when you leave Minnesota: a top income-tax rate of 9.85% on withdrawals, and a tax at death. Four taxes change when you move — income tax on withdrawals, state estate tax, state inheritance tax, and what probate costs your heirs. This page prices all four for Minnesota, then links a worked comparison for each destination.
What Minnesota actually charges a retiree
| Tax | Minnesota position, 2026 |
|---|---|
| State income tax | graduated to 9.85% (4 brackets, 5.35%-9.85%) |
| Social Security | Partially taxed: full subtraction of federally taxable SS if AGI ≤ ~$84,490 single / ~$108,320 MFJ (TY2025, indexed); subtraction phases out 10% per $4,000 of AGI above threshold (per $2,000 MFS), fully phased out above ~$120,490 / ~$144,320. Above that, taxed like federal. |
| Pension / 401(k) / IRA | Pensions, 401(k), and IRA distributions generally fully taxable. |
| Estate tax | yes – $3,000,000 exclusion (unchanged since 2020, not indexed); rates 13%-16%; additional qualified small business / farm property deduction up to $2,000,000 (combined max $5,000,000). Official 2025 Form M706 instructions confirm: ‘For 2025 decedents, the exclusion amount and tax filing threshold is $3,000,000… maximum qualified small business property and farm property deduction amount is $2,000,000’ |
| Inheritance tax | none |
| Probate fee model | reasonable-fee |
| Probate filing fee | ~$310-$365 to open probate (first-paper district court filing fee plus county law library fee; identical for informal and formal) — Minn. Stat. §357.021 and mncourts.gov fee schedule; certified letters $14 each |
| Small-estate limit | $75,000 (net of liens/encumbrances) — collection of personal property by affidavit, Minn. Stat. §524.3-1201; 30-day wait; notarized affidavit plus certified death record. |
Both halves matter
Minnesota taxes retirement withdrawals and levies a tax at death. A comparison that prices only the first will understate what a move is worth, sometimes by an order of magnitude, because the death-tax threshold is a one-off on the whole estate rather than a percentage of one year’s income.
Where Minnesota retirees go, and what each move is worth
Destinations below are drawn from documented retiree migration. Each links a worked, statute-cited comparison of all four taxes for that specific pair.
- Minnesota to Arizona — top rate falls; compare the death taxes too
- Minnesota to Texas — stop paying income tax on withdrawals and leave a death tax behind
- Minnesota to Nevada — stop paying income tax on withdrawals and leave a death tax behind
More Minnesota corridors
Minnesota is one of a small group of states that still taxes Social Security benefits above an income threshold — the subtraction phases out above roughly $84,490 of AGI for a single filer and $108,320 filing jointly — and it pairs that with a 9.85% top rate and a $3,000,000 estate exclusion that has not been indexed since 2020. These corridors price all four taxes that change on the move, each figure statute-cited for 2026:
Two more Minnesota corridors
Minnesota taxes Social Security, carries a 9.85% top rate and a $3,000,000 estate exclusion unindexed since 2020. These corridors price all four taxes that change on the move, each figure statute-cited for 2026:
A new destination: Mississippi
Mississippi fully exempts all qualified retirement income — public and private pensions, 401(k)/403(b) and IRA distributions — levies neither an estate nor an inheritance tax, and runs a flat 4% for 2026 falling to 3.75% in 2027. Minnesota to Mississippi prices all four taxes that change on the move, statute-cited for 2026.
Getting the sequence right
Leaving Minnesota cleanly is a sequencing problem as much as a tax one: domicile tests, what happens to property you keep behind, and the order of conversions and sales. See finding an advisor for a cross-state move for what to look for and the five questions to ask first.
Will Minnesota still tax me after I move away?
Not on your retirement withdrawals, once you genuinely change domicile — but that is a harder test than a change of address, and what you leave behind stays in reach.
- Domicile is a test, not an address. Minnesota can audit a departing resident. Days present, licence, registrations, where your advisers are and where you keep what you value all count.
- Property left behind stays reachable. Keeping a home in Minnesota can keep part of your estate inside Minnesota rules.
- Sequence any Roth conversion. It is taxed where you are domiciled in the year you convert — see how all 51 jurisdictions tax Roth conversions.
Full Minnesota detail: Minnesota retirement taxes. All corridors: retirement tax relocation hub.
Getting the order right
Move timing, conversion sequencing and estate exposure interact, and the order changes the total. Know what advice should cost before you buy it — see our advisor cost guide.
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Cite or share this guide
Suggested citation: Clear Money Guide, “Leaving Minnesota in Retirement: the 2026 Tax Position,” statute-cited; clearmoneyguide.com/leaving-minnesota-retirement-taxes/. Free to cite with attribution. Download the full dataset as CSV, or contact contact@clearmoneyguide.com for custom cuts.
Primary sources
- Minn. Stat. § 290.0132 (SS, military, public pension subtractions)
- MN DOR: Social Security Benefit Subtraction
- Qualified Public Pension Subtraction
- Minn. Stat. sec. 291.016
- Minn. Stat. sec. 291.03
- Minn. Stat. §524.3-719
- Minn. Stat. §524.3-1201
- Minn. Stat. §357.021