Clear Money Guide
What this state guide covers
A quick view of the questions, practical details and source notes below.
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Updated July 28, 2026. Quick answer: Yes. Minnesota taxes IRA and plan distributions in full with no general retirement exclusion, so a Roth conversion is taxed as ordinary income at the state rate on top of your federal bill.
Why a conversion is a different question from a withdrawal
Almost every state summary answers “how does Minnesota tax retirement income?” That is a question about distributions. A Roth conversion is not a distribution in the ordinary sense — it is a voluntary election to recognise income now in exchange for tax-free growth later. Whether a state’s retirement exclusion reaches that election is a separate question, and it is the one that decides your bill.
There is no exclusion to argue about here, which at least makes the maths clean: the converted amount is added to Minnesota taxable income in the conversion year.
Because the state cost is certain, the lever that matters in Minnesota is when and how much — splitting a conversion across tax years, or converting in a year of unusually low income, changes the bill in a way that arguing about the exclusion cannot.
What Minnesota does with the converted amount
State income tax: graduated to 9.85% (4 brackets, 5.35%-9.85%)
How Minnesota treats IRA and plan income: Pensions, 401(k), and IRA distributions generally fully taxable. Qualified public pension subtraction (TY2023+): up to $12,500 single / $25,000 MFJ (indexed) for public pension income from non-Social-Security-covered government employment (subject to income phase-outs).
| Conversion | State tax at 9.85% |
|---|---|
| $50,000 | $4,925 |
| $100,000 | $9,850 |
| $250,000 | $24,625 |
Straight arithmetic at the stated rate. It ignores deductions, credits, and any graduated bracket effects, so treat it as the ceiling rather than a filing figure.
Minnesota’s public-pension subtraction does not reach an IRA conversion.
Rates run to 9.85%, which puts $9,850 of state tax on a $100,000 conversion, and the qualified public pension subtraction applies to government pension income rather than to converted IRA money. That leaves spreading the conversion across years as the main thing available to you, and how far to spread it is a question about your own brackets.
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What to ask a preparer about Minnesota
None on eligibility — it is taxable. Ask instead how splitting the conversion across two tax years changes the bracket outcome.
Converting around a move
Converting in the year you move into Minnesota is the case that catches people. Residency at the moment of conversion is what generally determines which state gets to tax it, so a conversion executed a week before a move and one executed a week after can produce different bills.
Four separate taxes change when you move, not one: income tax on withdrawals, treatment of Social Security, estate tax, and inheritance tax. A state that looks good on conversions can be worse on the other three.
The state bill is the smaller half
Whatever Minnesota does, the conversion is federal ordinary income first. The federal bracket you land in, and whether the conversion pushes you over an IRMAA threshold two years later, will usually move more money than the state line does. The state answer tells you whether to convert here; the federal answer tells you how much to convert at once.
Paying the tax from outside the account matters more than either. Using converted dollars to pay the bill shrinks the balance that was the entire point of converting.
Sources
Authority: 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.
Compiled from state statutes, session laws and revenue-department publications and adversarially verified in July 2026. Dataset confidence for Minnesota: high.
This page states what the cited authority says. It is not tax advice, and a conversion large enough to matter is worth putting in front of a preparer who can see your whole return.
Nearby states
When a conversion is taxed in full at the state level, the state line is simply the amount times the rate — and the useful question becomes how large it is next to the federal bill. The Roth conversion state tax calculator puts the two side by side and shows what share of the total Minnesota is actually taking.