![]() ![]() ![]() Tax year 2017 Federal Adjusted Gross Income Table 2: Social Security benefits taxable federally and in Minnesota, Minnesota residents filing returns only, $50,000 of federal adjusted gross income (FAGI), and about 72 percent is from taxpayers with at least $75,000 of FAGI. The lowest-income taxpayers pay very little tax on their Social Security benefits, due largely to the federal exclusion.Ībout 92 percent of the Social Security benefits subject to Minnesota income tax is earned by taxpayers with at least Including residents who did not file a return,Ībout 33 percent of all benefits paid to Minnesota residents were subject to Minnesota income tax. 7 This implies that about $3.1 billion in benefits were paid to taxpayers who did notįile a return, likely because they had no Minnesota income tax liability. The Social Security Administration reported that about $15.968 billion in Old-Age, Survivors, and Disability Insurance (OASDI)īenefits were paid to Minnesotans in 2017. Minnesota Social Security Subtraction, which was enacted in the 2019 omnibus tax bill. These numbers do not account for the expansion of the Taxable federally, and about 41.3 percent was taxable in Minnesota. ![]() Resident returns in Minnesota reported about $12.8 billion in Social Security benefits. The most recent year for which data is available is tax year 2017 (returns filed in 2018). 5 Social Security Benefits Subject to Minnesota Income Tax That included a Social Security beneficiary paid state income tax on their benefit. Then about 784,000 total households included a Social Security beneficiary, 4Īnd about 45 percent of Minnesota families If the federal estimate of 72 percent of beneficiaries’ families filing returns applies to state returns as well, Income tax on their Social Security benefits, and only about 72 percent of beneficiary families file income tax However, research by the Social Security Trustees suggests that just over half of Social Security recipients pay federal That represents about 62 percent of all resident returns filed in Minnesota with Social Security Approximately 62% of Minnesota resident returns among households receiving Social Security benefits.Īmong taxpayers filing returns, about 352,000 resident returns paid at least some Minnesota tax on their Social Securityīenefits in tax year 2017.45% of estimated Minnesota households receiving Social Security benefits.Share of returns paying any Minnesota income taxes on Social Security benefits: Resident returns that paid state tax on Social Security income Resident returns filed with Social Security incomeĮstimated total households that include a Social Security beneficiary 2 Income tax, and total beneficiaries, tax year 2017 1 Total resident returns Returns and Beneficiaries Paying Minnesota Tax on Social Security Benefits Table 1: Minnesota resident returns, returns with Social Security benefits, returns that paid state The percentage of resident Social Security benefits that are subject to tax in Minnesota.The percentage of resident beneficiaries that paid at least some tax on their benefits.The percentage of tax returns with Social Security benefits that paid at least some tax on thei benefits.ThereĪre at least three ways to measure the extent of Social Security taxation in the state: The extent to which Social Security benefits are subject to Minnesota income tax depends on the measure used. “flows through” to the taxpayer’s Minnesota income tax, and an additional Minnesota-specific subtraction availableįor a portion of the income that is taxable federally. Separate tax policies that result in Social Security benefits being nontaxable-an exclusion in federal law that Exemption from Minnesota Income TaxĪ taxpayer’s Social Security benefits are fully or partially exempt from Minnesota’s income tax. It additionally includes brief historical context on the federal exclusionĪnd state subtraction. This webpage describes how the federal exclusion and state subtraction are calculated, shows the income levelsĪt which taxpayers are subject to taxes on Social Security benefits, and provides a survey of the tax treatment Receiving Social Security benefits pay tax on their benefits. Overall, approximately 33 percent of Social Security benefits paid to Minnesota residents are subject to tax,īut approximately 62 percent of resident returns with Social Security benefits paid tax on that income.Īfter accounting for residents who do not file state tax returns, about 45 percent of Minnesota households Is the result of two separate policies-the federal exclusion from gross income for a portion of Social Securityīenefits, and the Minnesota Social Security Subtraction. Only a portion of Social Security benefits is subject to Minnesota income taxes. ![]()
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