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Last Updated: 6/19/2013

New 4th Tier Income Tax Rate

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​Starting Jan. 1, 2013, Minnesota added a fourth tier to individual income tax rates.  The new tax rate is 9.85 percent.  The table below shows when income is subject to the new rate for 2013 and later. Only taxable income above the listed threshold is subject to the fourth-tier rate:  

Your Filing Status is: ​ And Your Taxable Income is More Than:​
Married Filing Jointly or Qualifying Widow(er)​ $250,000​
Married Filing Separately​ $125,000​
Head of Household​ $200,000​
Single​ $150,000​

When does this start?

Jan. 1, 2013.

Will I owe more tax when I file my 2013 return?

The new tax rate applies to taxable income earned in 2013 and above the listed threshold (see table above).  Since the new withholding tables and formula were not in effect during the first half of 2013, your employer may not have withheld enough tax from your paycheck for the first half of the year. This could result in you owing tax when you file you 2013 Minnesota Income Tax Return next year. 


Is there anything I can do to avoid having to pay more tax with my 2013 return?

You may want to have additional tax withheld by changing your withholding allowances.  You can complete Form W-4MN to do that. 

You can also make an estimated income tax payment


What happens if I  underpay my quarterly estimated tax because of this new tier? 

You will not be penalized for the portion of your underpayment that results from the new tax rate for quarterly estimated tax payments due April 15, June 15, or September 15, 2013.