Updated October 1, 2026. Quick answer: Minnesota does tax Social Security benefits, but it also lets taxpayers subtract them. For tax year 2026 the full subtraction of the benefits included in federal adjusted gross income (AGI) applies up to $110,780 of AGI for joint filers and surviving spouses, $86,410 for single and head of household filers, and $55,390 for married filing separately. Above those thresholds the subtraction shrinks by 10% for each $4,000 of AGI, or fraction of $4,000, ($2,000 for married filing separately). A second, alternate method can give a larger subtraction and the taxpayer gets the greater of the two.
The state’s income tax schedule: the Minnesota tax brackets for 2026.
How the threshold is set
Minnesota’s statute sets the phase-out threshold in tax year 2023 dollars and tells the Revenue Commissioner to adjust it each year: “The commissioner shall adjust the phaseout threshold amounts in paragraph (c), clauses (1) and (2), as provided in section 270C.22”. The statutory base is $100,000 for a married couple filing jointly and $78,000 for a single or head of household filer, and a married person filing separately gets half the joint amount. The figures that apply today are the indexed ones.
Thresholds, statutory base and indexed
| Filing status | Statutory base (2023) | Prior year (DOR subtraction page) | Tax year 2026 (DOR inflation table) |
|---|---|---|---|
| Married filing jointly or surviving spouse | $100,000 | $108,320 | $110,780 |
| Single or head of household | $78,000 | $84,490 | $86,410 |
| Married filing separately (half the joint amount) | $50,000 | $54,160 | $55,390 |
The Minnesota Department of Revenue’s inflation table for tax year 2026 prints “Simplified Subtraction Phase-out Threshold” amounts of $110,780, $86,410 and $55,390 for the three groups, each with 2023 as the statutory year. The Department’s Social Security subtraction page, last updated December 17, 2025, still prints $108,320 for joint filers, $84,490 for single or head of household filers and $54,160 for married filing separately, with no tax year attached. We read those as the tax year 2025 amounts: the same single indexing factor reproduces both the joint and the single figure. For 2026 the factor is 1.1078 (110,780 divided by 100,000), and $78,000 times that factor is 86,408.4, which the statute’s rounding rule turns into $86,410. For the year before, the factor is 1.0832 and $78,000 times it is 84,489.6, which rounds to $84,490. The married-separate figure is half the joint one in every column. The statute’s own rounding rule reads “The maximum subtraction and threshold amounts as adjusted must be rounded to the nearest $10 amount”.
How the simplified subtraction phases out
The simplified subtraction equals the taxable Social Security benefits, reduced as the statute says: “the simplified subtraction is reduced by ten percent for each $4,000 of adjusted gross income, or fraction thereof, in excess of the phaseout threshold”. For a married person filing separately the step is $2,000. The Department’s page puts it the same way: “The subtraction is phased out by 10% for each $4,000 of AGI in excess of the income levels mentioned”.
Worked example, computed here from assumed inputs and not taken from any source: a single filer in tax year 2026 with AGI of $91,410 and taxable Social Security of $20,000.
| Step | Result |
|---|---|
| AGI over the $86,410 threshold | Computed: $5,000 (91,410 minus 86,410) |
| Steps of $4,000, or fraction of a step | Computed: 2 steps (5,000 divided by 4,000 is 1.25, rounded up) |
| Reduction | Computed: 20% (2 steps times 10%) |
| Share of benefits subtracted | Computed: 80% (what is left after the 20% reduction) |
| Simplified subtraction | Computed: $16,000 ($20,000 times 80%) |
| Provisional income, with no tax-exempt interest | Computed: $101,410 ($91,410 plus half of $20,000) |
| Provisional income over the $69,250 alternate threshold | Computed: $32,160 (101,410 minus 69,250) |
| Alternate reduction and result | Computed: 20% of $6,432 is more than the $4,560 maximum, so the alternate subtraction is zero and the $16,000 simplified subtraction applies |
The alternate subtraction
The alternate subtraction is the older method. The statute says it “equals the lesser of taxable Social Security benefits or a maximum subtraction”, and the maximum shrinks as provisional income rises. Provisional income is defined as “modified adjusted gross income as defined in section 86(b)(2) of the Internal Revenue Code, plus one-half of the taxable Social Security benefits received during the taxable year”.
| Filing status | Maximum subtraction | Reduced by 20% of provisional income over |
|---|---|---|
| Married filing jointly or surviving spouse | $5,840 | $88,630 |
| Single or head of household | $4,560 | $69,250 |
| Married filing separately | $2,920 | $44,315 |
The Department’s 2026 table lists these alternate amounts as “Not Indexed”. The statute makes the choice automatic in the taxpayer’s favor: a taxpayer is allowed “a subtraction equal to the greater of the simplified subtraction allowed under paragraph (b) or the alternate subtraction”.
What this does not tell you
Minnesota starts from the federal figure, so how much of a benefit is taxable at the federal level comes first; the federal calculation is on the taxable Social Security calculator. Pension and retirement account withdrawals are treated separately, on the Minnesota pension page and in the full state picture on Minnesota Retirement Taxes. Minnesota’s schedule of thresholds is re-published each year in the Department’s inflation table, so a later tax year will have different figures. This page does not estimate them in advance.
Common mistakes
- Using the unindexed $100,000 and $78,000 from the statute as this year’s thresholds. They are 2023 dollars; the indexed ones are higher.
- Mixing years. The Department’s subtraction page can carry the prior year’s thresholds while its inflation table carries the current year’s.
- Forgetting the “or fraction thereof”: AGI one dollar over the threshold already costs a full 10% step.
- Stopping at the simplified method. The alternate subtraction can be larger for some filers, and the return takes the greater.
- Reading “subtraction” as “exemption”. Above the phase-out the benefit is taxed in part or in full.
Related on this site: all of Minnesota’s retirement taxes, whether Minnesota taxes pensions and the federal taxable-Social-Security calculator.
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Answer againSources
- Minnesota Department of Revenue, Tax Year 2026 Inflation-Adjusted Amounts in Minnesota Statutes (December 2025): https://www.revenue.state.mn.us/sites/default/files/2025-12/inflation-adjusted-amounts-2026.pdf
- Minnesota Department of Revenue, Social Security Benefit Subtraction (last updated December 17, 2025): https://www.revenue.state.mn.us/social-security-benefit-subtraction
- Minnesota Statutes 290.0132, subdivision 26, Social Security benefits (Office of the Revisor of Statutes): https://www.revisor.mn.gov/statutes/cite/290.0132
Sources: the primary documents linked above, read on October 1, 2026. General information, not legal or tax advice. Your own facts decide the outcome, and a Florida, Texas or Vermont real-property lawyer, or a tax preparer, is the right place to confirm anything consequential.