Updated September 4, 2026. Quick answer: Mostly yes. Minnesota taxes private pensions and IRA/401(k) distributions fully, with no exclusion. Public and federal pensions get a partial subtraction, but only for retirees whose service did not earn Social Security credit. Military retirement pay is fully exempt.
State retirement-income forms, line by line: Minnesota Schedule M1R.
Inherited an IRA? What the state’s own documents say about taxing those withdrawals: Minnesota tax on inherited IRA withdrawals.
Drawing a pension? Whether the state withholds tax from it, from its own documents: Minnesota tax withholding on pension payments.
The Minnesota PERA Police and Fire Plan options, refund and annual increase rules, from PERA’s own documents: Minnesota PERA Police and Fire retirement decisions.
Married, or planning for a spouse’s death? Whether the state is a community property state, from its own statutes: Is Minnesota a community property state?.
Selling your home? How the state taxes the profit, from its own tax documents: Does Minnesota tax the profit from selling your home?.
Withdrawing from an IRA or 401(k)? Whether the state withholds tax from it, from its own documents: Minnesota tax withholding on IRA and 401(k) withdrawals.
A pension earned in another state, or paid after a move, is covered here: does Minnesota tax out-of-state pensions.
Trusts have their own page: does Minnesota tax trust income.
Inheriting from, or planning for, someone in this state? Whether the state has an inheritance tax, from its own tax documents: Does Minnesota have an inheritance tax?.
Dividends and interest have their own page: does Minnesota tax dividends and interest.
Making a gift or planning an estate? The state’s gift tax answer, from its own tax documents: Does Minnesota have a gift tax?.
Annuity payments have their own page: does Minnesota tax annuity income.
Military retired pay has its own page: does Minnesota tax military retirement.
Saving for a child’s college? The state’s 529 break has its own page: Minnesota 529 plan tax deduction.
Selling stocks, funds or real estate has its own page: does Minnesota tax capital gains.
Withdrawals from a 401(k) or IRA have their own page: does Minnesota tax 401(k) and IRA withdrawals.
The state’s income tax schedule: the Minnesota tax brackets for 2026.
The MSRS survivor options, refund and rollover rules, from the system’s own pages: Minnesota MSRS retirement decisions.
The Social Security subtraction, by filing status: does Minnesota tax Social Security.
Confidence note: high. This page is scoped to pension, IRA and 401(k) taxation specifically. For the state’s full retirement-tax picture (Social Security, tax rates, estate and probate), see how Minnesota taxes retirement income generally.
How pensions and retirement-account withdrawals are taxed
| Public (state/local government) pensions | Partially exempt via the Qualified Public Pension Subtraction, but only for retirees whose covered service did not earn Social Security credit; capped (currently $13,540 single/$27,080 joint), phasing out as income rises and unavailable above $103,489 single/$127,319 joint AGI (Minnesota Department of Revenue). This structure only took effect for tax year 2023. |
|---|---|
| Private (employer) pensions | Fully taxable. No Minnesota subtraction exists for private pensions. |
| Federal government pensions (FERS/CSRS) | Taxable in general, but federal retirees whose service did not earn Social Security credit qualify for the same public-pension subtraction described above. |
| Military retirement pay | Fully exempt, no dollar cap, under Minn. Stat. sec. 290.0132, subd. 21, for taxpayers who do not claim the military service credit under sec. 290.0677. |
| IRA and 401(k)/403(b) distributions | Fully taxable. No Minnesota-specific subtraction exists for IRA, 401(k), or 403(b) distributions. |
| General retirement-income exclusion | Two separate provisions, neither pension-specific: a Social Security subtraction (full below about $84,500 single/$108,300 joint AGI, phasing out above that), and an age-65-or-disabled subtraction (base $9,600 single/$12,000 joint, reduced by nontaxable retirement income and half of excess AGI). |
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Social Security has its own separate subtraction (full below roughly $84,500 single/$108,300 joint AGI), unrelated to the pension rules above. Social Security has its own rules in every state; see the full breakdown in how Minnesota taxes retirement income generally.
Figures verified against Minnesota Statutes sections 290.0132, 290.0802 and 290.0677 and the Minnesota Department of Revenue public pension and Social Security subtraction pages on September 30, 2026.
Statute and sources
Governing citation: Minn. Stat. sec. 290.0132, subd. 5 (elderly/disabled), subd. 21 (military), subd. 26 (Social Security), subd. 34 (public pension).
Read September 4, 2026.
Related: how Minnesota taxes retirement income generally · does Minnesota tax Roth conversions? · Roth conversion taxes, all 51 jurisdictions.
General information drawn from each state’s own published statutes and revenue-department guidance, not legal, tax or financial advice. Figures and exemption amounts are current as of the date in the quick answer, are set by state law, and can change by future legislation; any pending bill named on this page is not yet law. This page cannot see your own return, which governs. We are not a law firm, a tax adviser, or a fiduciary, and this is not personalized advice.