Updated October 7, 2026. Quick answer: Only if you live there. The Schedule M1NR instructions count IRA distributions and pension payments as Minnesota income only if “received while a Minnesota resident.”
State retirement-income forms, line by line: Minnesota Schedule M1R.
How Minnesota treats a pension earned elsewhere
| Item | What the state documents say |
|---|---|
| Nonresidents | The Form M1 instructions list the Minnesota source income that counts for a nonresident: wages for work done in Minnesota, rents and royalties from Minnesota property, gains on Minnesota property, Minnesota gambling winnings, and certain business and partnership income. Pensions are not on the list. The Schedule M1NR pension line takes only payments received while a Minnesota resident. |
| Residents with a pension earned elsewhere | Minnesota starts a resident return from federal adjusted gross income, so a taxable pension from any state is included unless a specific subtraction applies. The instructions list subtractions for military pensions, taxable qualified public pension benefits for service without Social Security credit, and foreign service pensions. Private pensions earned elsewhere have no general exclusion, but a Social Security benefit subtraction is available: taxable benefits are fully subtractable if adjusted gross income is below $84,490 for single or head of household filers or $108,320 for joint filers. The Social Security subtraction applies to benefits, not to pension payments. |
| Part-year residents (year of a move) | A part-year resident completes Schedule M1NR to separate income received while a Minnesota resident from Minnesota source income received while a nonresident, and Minnesota tax is based on that income. Pension and annuity payments are counted when received while a Minnesota resident. The source says: “pension and annuity payments from lines 4b and 5b”. The filing threshold for 2025 is Minnesota gross income of $14,950 or more. |
| Rate | Minnesota prints a graduated schedule for 2025 that starts at 5.35% and tops out at 9.85%. The rates appear in the Form M1 instructions tax tables. |
| Return to file | Residents file Form M1, Individual Income Tax. Part-year residents and nonresidents file Form M1 with Schedule M1NR, Nonresidents/Part-Year Residents. |
A $40,000 move-year example
A retiree receives $40,000 of pension in the year of a move: $20,000 before the move date, as a Minnesota resident, and $20,000 after leaving.
The first $20,000 can be taxed by Minnesota; the rest is outside its reach under the federal rule below. Taxed wholly at the lowest printed rate, 5.35%, the tax on it is computed as $20,000 x 0.0535 = $1,070; taxed wholly at the highest, 9.85%, it is computed as $20,000 x 0.0985 = $1,970. The real figure falls between these bounds before any exclusion or credit. Federal tax still applies.
The federal rule that protects a nonresident
4 U.S.C. 114(a) bars a state income tax on retirement income of an individual “who is not a resident or domiciliary of such State”. Retirement income means certain plan payments made as a “series of substantially equal periodic payments”, so not every payment is covered.
Related: how Minnesota taxes retirement income, whether Minnesota taxes pensions, Minnesota to Arizona retirement taxes, Minnesota to Florida retirement taxes, out-of-state pension tax by state, and deferred compensation lump sums after a move.
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Answer againSources
- 2025 Minnesota Individual Income Tax Forms and Instructions, Form M1 (Minnesota Department of Revenue): https://www.revenue.state.mn.us/sites/default/files/2026-10/m1-inst-25.pdf
- 2025 Schedule M1NR, Nonresidents/Part-Year Residents (Minnesota Department of Revenue): https://www.revenue.state.mn.us/sites/default/files/2026-07/m1nr-25.pdf
- 2025 Schedule M1M, Income Additions and Subtractions (Minnesota Department of Revenue): https://www.revenue.state.mn.us/sites/default/files/2026-07/m1m-25.pdf
- 4 U.S.C. 114, Limitation on State income taxation of certain pension income (U.S. Government Publishing Office, 2023 edition): https://www.govinfo.gov/content/pkg/USCODE-2023-title4/html/USCODE-2023-title4-chap4-sec114.htm
Sources: the primary documents linked above, read on October 7, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the plan administrator or the agency itself is the right place to confirm anything consequential.