Minnesota State Tax Filing Guide: Income Tax Rates, Forms & Deadlines

1. What Is Minnesota State Tax Filing?

Minnesota state income tax filing refers to the process of reporting certain types of income to the Minnesota Department of Revenue. Importantly, Minnesota imposes a state personal income tax on individuals and a corporate franchise tax on most businesses.

Filing obligations may also apply to nonresidents with Minnesota-source income, part-year residents, pass-through entities such as partnerships and S corporations, fiduciaries, and employers with Minnesota tax responsibilities. This process is separate from federal income tax filing with the IRS.

2. Who Must File in Minnesota?

Most individuals who meet Minnesota income filing thresholds or have Minnesota-source income must file a Minnesota state income tax return.

Filing may also be required in the following situations:

Quick checklist (common scenarios)

1. Full-year residents whose gross income meets or exceeds Minnesota filing thresholds
2. Nonresidents with Minnesota-source income (such as wages, business income, rental income, or royalties earned in Minnesota)
3. Part-year residents who lived in Minnesota for part of the year or earned income while a Minnesota resident
4. Pass-through entities (partnerships, S corporations, and certain LLCs) required to file Minnesota informational, composite, or withholding returns
5. Taxpayers who had Minnesota income tax withheld and want to claim a refund

3. Minnesota Tax Forms – What to File

Minnesota does require individuals to file a personal state income tax return if they meet income thresholds or have Minnesota-source income. Standard Minnesota individual income tax forms apply to most resident, part-year resident, and nonresident taxpayers.

When Minnesota tax forms are required

1. Individual income tax returns (Form M1 for residents and part-year residents, Form M1NR for nonresidents) are required for taxpayers with Minnesota-source income
2. Corporate Franchise Tax returns apply to C corporations doing business in Minnesota
3. Pass-through entity filings apply to partnerships, S corporations, and certain LLCs required to file informational or composite returns
4. Mining Tax filings apply to qualifying mining and taconite operations in Minnesota
5. Withholding and information returns apply to employers or payers with Minnesota tax obligations

Individuals living in or earning income from Minnesota are generally subject to Minnesota state income tax. Identifying the correct forms early helps ensure accurate filing and compliance.

4. Documents Required for Minnesota Tax Filing

If you are required to file a Minnesota state tax return, prepare the following documents in advance:

1. W-2 and 1099 forms: showing wages, compensation, or other income earned, including Minnesota-source income
2. Federal tax return (Form 1040): used as the starting point for Minnesota income tax calculations
3. Minnesota withholding records: showing any Minnesota state income tax withheld (often included on W-2s or 1099s)
4. Business, rental, or other income records: income, expenses, and supporting documentation for Minnesota-reportable activities
5. Prior Minnesota tax returns (if applicable): helpful for reference, consistency, and available carryforwards or credits

5. DIY vs Accountant vs Managed Filing

Non-US founders and remote business owners with Minnesota filing obligations typically choose one of three approaches: DIY filing, hiring an accountant, or using managed tax filing services.

What typically increases complexity?

1. Minnesota-source income (wages, business income, rentals, or other in-state activities)
2. Multi-state operations and income apportionment requirements
3. Pass-through entities with Minnesota nexus, withholding, or composite reporting obligations

6. Step-by-Step: Minnesota State Tax Filing (State-Specific)

Step 1: Confirm your Minnesota filing requirement

First, determine whether you are a Minnesota resident, part-year resident, or nonresident. You generally must file a Minnesota state income tax return if you meet state income thresholds or earn Minnesota-source income such as wages, business income, rental income, or pass-through income.

Step 2: Prepare your federal tax return first

Minnesota state tax filing starts with your completed federal income tax return. Most individuals must file IRS Form 1040 before preparing their Minnesota return. Federal income figures flow directly into Minnesota calculations.

Federal forms and instructions are available directly from the IRS.

Step 3: Gather Minnesota-specific income and withholding documents

Collect all documents showing Minnesota income or withholding, including W-2s, 1099s, Schedule K-1s, and any records related to Minnesota business, rental, or investment activity. Minnesota withholding is commonly reported on your federal income documents.

Step 4: Choose the correct Minnesota tax form

Most taxpayers file Form M1 if they are Minnesota residents or part-year residents. Nonresidents with Minnesota-source income typically file Form M1NR. Businesses and pass-through entities may have additional Minnesota filing or withholding obligations.

Step 5: Business owners – confirm EIN and state tax responsibilities

If you operate a business, LLC, or corporation with Minnesota tax obligations, you must have a valid Employer Identification Number (EIN). EINs are issued by the IRS and are required for most business tax filings.

You can apply for an EIN directly with the IRS: Apply for EIN.

Step 6: File your Minnesota return and pay any tax due

Minnesota individual income tax returns are generally due by April 15, aligning with the federal deadline. Filing can be completed electronically using approved tax software or Minnesota Department of Revenue e-Services, or by mailing a paper return.

Step 7: Keep records and plan ahead

Retain copies of your federal and Minnesota tax returns, payment confirmations, and supporting documents. Maintaining accurate records helps prevent notices, simplifies future filings, and supports compliance with Minnesota tax requirements.

7. Tips to Avoid Minnesota Tax Notices

• Confirm whether you are required to file based on residency status and Minnesota income thresholds
• Report all Minnesota-source income accurately, including wages, business, and rental income
• File by the Minnesota filing deadline (generally April 15 for individuals, unless extended)
• Keep clear records of income sources, deductions, credits, and any income apportionment calculations
• Respond promptly and completely to any correspondence from the Minnesota Department of Revenue

8. Minnesota Tax Costs, Penalties, and Filing Timelines

Minnesota imposes a progressive personal income tax and enforces strict compliance rules. Understanding applicable tax rates, penalties, and timelines helps taxpayers avoid unnecessary interest charges and notices from the Minnesota Department of Revenue.

• Personal income tax rates: Minnesota uses progressive state income tax brackets that vary based on filing status and taxable income.
• Late filing penalty: Generally up to 10% of unpaid tax when a required return is filed late.
• Late payment penalty: Applies when tax is not paid by the original due date, even if an extension is filed.
• Interest on unpaid tax: Accrues daily at rates set annually by the Minnesota Department of Revenue until the balance is fully paid.
• Filing extensions: Minnesota generally follows the federal extension. Filing an extension moves the deadline to October 15, but any tax owed must still be paid by April 15.

9. Common Federal & Minnesota Tax Forms

Federal Tax Forms (Commonly Used)

• Form 1040 – U.S. Individual Income Tax Return
• Schedule C – Profit or Loss From Business (sole proprietors)
• Schedule E – Supplemental Income (rentals, royalties, pass-through income)
• Schedule K-1 – Partnership or S-Corporation income reporting

Minnesota Tax Forms

• Form M1 – Minnesota Individual Income Tax Return (full-year and part-year residents)
• Form M1NR – Nonresident Income Tax Return for Minnesota-source income
• Form M4 – Minnesota Corporation Franchise Tax Return for C-corporations
• Composite income tax returns – For pass-through entities filing on behalf of nonresident owners
• Withholding and information returns – For employers or payers with Minnesota tax withholding obligations

10. Conclusion

Minnesota imposes a personal state income tax on residents, part-year residents, and nonresidents with Minnesota-source income. While tax rates and filing requirements vary depending on residency status and income type, understanding your obligations is essential to remaining compliant.

Taking the time to confirm your filing requirements helps you avoid penalties, delays, and unnecessary notices. FormLLC can help review your Minnesota tax obligations and guide you through the filing process clearly and efficiently.