Updated October 4, 2026. Quick answer: Yes. Minnesota taxes 401(k) and IRA withdrawals: the statute defines net income as “federal adjusted gross income”. A low-income subtraction for filers 65 or older exists but requires a single-filer income under $33,700.
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.
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.
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?.
What Minnesota does with 401(k) and IRA withdrawals
Schedule M1R requires a filer to be “aged 65 or older (born before January 2, 1961)” or disabled, and to meet its income limits.
| Item | What the documents say |
|---|---|
| Treatment | Taxable; the age 65 subtraction on Schedule M1R is income-limited |
| State rates | 5.35%, 6.80%, 7.85% and 9.85%; the top rate is 9.85% in 2025 and 2026 |
| Source | Minnesota Statutes 290.01, Minnesota Department of Revenue rates page and 2025 Schedule M1R |
A $40,000 withdrawal
All $40,000 of a traditional withdrawal is part of Minnesota income. The tax it adds depends on your other income and on which of the four brackets it lands in.
Conditions that decide the answer
- Single filers 65 or older: adjusted gross income under $33,700 and nontaxable Social Security plus Railroad Retirement benefits under $9,600.
- Married filing jointly, both 65 or older: income under $42,000 and benefits under $12,000.
Single-filer rate schedule
| Rate | 2025 single filer | 2026 single filer |
|---|---|---|
| 5.35% | Up to $32,570 | Up to $33,310 |
| 6.80% | $32,571 to $106,990 | $33,311 to $109,430 |
| 7.85% | $106,991 to $198,630 | $109,431 to $203,150 |
| 9.85% | Over $198,630 | Over $203,150 |
What changes in 2026
The Department’s rates page raises the bracket thresholds for 2026; the four rates are unchanged.
Federal rules
The state’s treatment sits on top of the federal one. The IRS explains the federal tax on these withdrawals in Publication 590-B, Distributions from Individual Retirement Arrangements and Publication 575, Pension and Annuity Income.
Related: whether Minnesota taxes pensions, how Minnesota taxes retirement income, whether Minnesota taxes Roth conversions, and the state-by-state table of 401(k) and IRA withdrawal tax.
Find the right next step for your situation
About how much do you have invested? Pick the range that fits; your next step appears immediately below.
Compare vetted advisors for retirement withdrawals
If your portfolio is $250,000 or more, this connects you (free, with no obligation to hire anyone) with 2 to 3 vetted advisors.
Before you start, what actually happens. The matching service is run by WiserAdvisor, an independent advisor-matching company. It opens on their site, asks for your ZIP code and a few questions, and matches you with 2 to 3 vetted advisors. It is free to you.
WiserAdvisor states the service is built for portfolios of $250,000 and above. By submitting, you consent to emails, phone calls and text messages from WiserAdvisor and up to three advisors, so expect to be contacted. Clear Money Guide may earn a referral payment for a qualifying completed form, whether or not you ever hire anyone.
Opens on WiserAdvisor’s site in a new tab.
See how an advisor plans your withdrawals
Price the destination before you decide. The matching service below introduces you to advisers who pay to meet you.
Before you start, what actually happens. The form is run by Kapitalwise, our advisor-matching partner. Kapitalwise sends your details to advisers who pay for the introduction, so expect calls and texts. Clear Money Guide may earn a referral payment for a qualifying submitted form, whether or not you ever hire anyone. This is free to you and there is no obligation to hire anyone.
The Kapitalwise form opens here; you stay on this page.
What happens when you press the button
It asks about nine questions: age, investable assets, location; then your name, email and phone number, and verifies the phone by text. Nothing loads and nothing reaches Kapitalwise until you press the button.
Prefer flat-fee or hourly pricing instead? Compare ranges here.
Answer againSources
- Minnesota Statutes section 290.01 Definitions: https://www.revisor.mn.gov/statutes/cite/290.01
- Income Tax Rates and Brackets: https://www.revenue.state.mn.us/minnesota-income-tax-rates-and-brackets
- 2025 Schedule M1R, Age 65 or Older/Disabled Subtraction: https://www.revenue.state.mn.us/sites/default/files/2026-07/m1r-25.pdf
Sources: the primary documents linked above, read on October 4, 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.