Credits reduce the taxes you owe. Both refundable and nonrefundable credits can reduce your tax to zero. If your refundable credits exceed the tax you owe, it can create a refund on your tax return.
Under state law, Minnesota’s income tax brackets are recalculated each year based on the rate of inflation. The indexed brackets are adjusted by the inflation factor and the results are rounded to the nearest $10. Income tax rates are also set by law.
Subtractions are allowable deductions to your federal adjusted gross income. Claiming subtractions reduces your income taxable to Minnesota.Learn more about Minnesota subtractions below.