fbpx

Latest Posts

Home

Facebook

Twitter

Search
About

Minnesota is the 5th most tax unfriendly state for retirees

Kiplinger has released its 2019 ranking of the Least Tax-Friendly States for Retirees. Minnesota comes in fifth. Kiplinger explains

The North Star State offers cold comfort on the tax front to retirees. Social Security income is taxable to the same extent as it is on your federal return, though taxpayers with taxable Social Security income can deduct up to $5,150 for joint filers, up to $4,020 for single filers, and up to $2,575 for married taxpayers filing a separate return. Pensions are also taxable, unless they’re from the military. Distributions from IRAs and 401(k) plans are taxable, too.

There is a special income tax deduction for certain senior citizens. Taxpayers 65 and older can deduct up to $9,600 for single filers or $12,000 for joint filers. However, due to the deduction’s phased-out rules, seniors making more than $33,700 (single) or $42,000 (joint) can’t claim this tax break.

Food, clothing, prescription and nonprescription drugs are exempt from the state’s 6.88% sales tax. A few cities and counties also add a sales tax, which can be as much as 2%. The average combined state and local sales tax rate in Minnesota is 7.43%, which is above the national average.

Property tax rates are slightly above average in Minnesota. For a $400,000 home in the state, the owner would pay about $4,897 per year. The state’s Senior Citizen Property Tax Deferral Program allows people age 65 or older, whose household income is $60,000 or less, to defer a portion of the property tax on their home.

For 2019, estates valued at more than $2.7 million are subject to a maximum estate tax rate of 16%. The exemption will rise to $3 million for 2020 and beyond. Assets left to a surviving spouse are exempt.

But don’t bother driving grandma and grandpa to Wisconsin, they come in fourth.

John Phelan is an economist at the Center of the American Experiment. 

Comments

Subscribe

Categories

Upcoming Events

  • Morning in Minnesota: Red Wing

    Location: St. James Hotel 406 Main StreetRed Wing, MN 55066

    Please join Center of the American Experiment on Tuesday, December 17th at the St. James Hotel for a free breakfast with Center policy fellow and education expert, Catrin Wigfall as she explains the Center’s “Great Jobs Without a Four-Year Degree” project.

    Register Now
  • Twin Cities Reception with Andrew C. McCarthy

    Location: Metropolitan Ballroom & Clubroom5418 Wayzata Boulevard, Golden Valley, MN, 55416

    Please join Center of the American Experiment and National Review Institute for a reception with Andrew C. McCarthy, a former top federal prosecutor, a senior fellow at National Review Institute, a contributing editor at National Review, a Fox News contributor, and a well-known commentator on legal, national security, and political affairs. His new book, Ball of Collusion, is a story about what happens when those we trust to be the guardians of our system anoint themselves the masters of our system. For our own good, of course. As for collusion, that word we’ve heard so incessantly from pundits and leaky…

    Register Now
  • Rochester Lunch Forum with Andrew C. McCarthy

    Location: Hilton Rochester Mayo Clinic Area10 East Center Street, Rochester, MN, 55904

    Please join Center of the American Experiment and National Review Institute for lunch with Andrew C. McCarthy, a former top federal prosecutor, a senior fellow at National Review Institute, a contributing editor at National Review, a Fox News contributor, and a well-known commentator on legal, national security, and political affairs. His new book, Ball of Collusion, is a story about what happens when those we trust to be the guardians of our system anoint themselves the masters of our system. For our own good, of course. As for collusion, that word we’ve heard so incessantly from pundits and leaky government…

    Register Now