Minnesota made several updates that affect deductions, exemptions, credits, and income adjustments for the 2026 tax year. Here are the key changes taxpayers should know when filing their 2026 Minnesota return.
What Changed for Minnesota Deductions?
Standard Deduction Increased
Minnesota increased the standard deduction for all filing statuses for the 2026 tax year:
| Filing Status | 2026 Standard Deduction |
|---|---|
| Single | $15,300 |
| Married Filing Jointly or Qualifying Surviving Spouse | $30,600 |
| Married Filing Separately | $15,300 |
| Head of Household | $23,000 |
If you're married filing separately, you can only claim the Minnesota standard deduction if your spouse does not itemize deductions.
Standard Deduction Income Limitation
The standard deduction may be reduced if your Minnesota adjusted gross income exceeds:
- $244,400 for most filers
- $122,200 for Married Filing Separately
For taxpayers with adjusted gross income of $1,107,750 or more, the standard deduction is reduced by 80%.
Itemized Deductions
Minnesota continues to allow taxpayers to itemize deductions on their Minnesota return even if they claimed the federal standard deduction.
Minnesota itemized deductions begin to phase down when adjusted gross income exceeds:
- $244,400 for most filers
- $122,200 for Married Filing Separately
If adjusted gross income exceeds $1,107,750, itemized deductions are limited to 20% of otherwise allowable deductions.
New Charitable Contribution Limitation
Beginning in 2026, taxpayers claiming the Minnesota charitable contribution deduction or subtraction can only deduct contributions that exceed 1% of their contribution base, which is generally federal adjusted gross income.
What Changed for Dependent Exemptions?
The dependent exemption increased to $5,300 per qualifying dependent for 2026.
Your exemption may be reduced if your income exceeds:
| Filing Status | Income Threshold |
|---|---|
| Single | $244,500 |
| Married Filing Jointly or Qualifying Surviving Spouse | $366,700 |
| Head of Household | $305,600 |
| Married Filing Separately | $183,350 |
Once income exceeds the applicable threshold, the exemption gradually phases out and may be eliminated entirely at higher income levels.
Advance Child Tax Credit Updates
Text Message Notifications
Taxpayers who elect to receive advance Child Tax Credit payments can now choose to receive text message updates about payment disbursements.
Filing Requirement
Taxpayers who elected advance Child Tax Credit payments for 2026 on their 2025 Minnesota return must file a 2026 Minnesota income tax return, even if they would otherwise not be required to file.
New Additions and Subtractions
Educational Assistance Addition
Starting in 2026, Minnesota requires taxpayers to add back certain federally tax-free educational benefits, including:
- Employer-provided student loan repayment assistance
- Certain employer-provided tuition assistance and educational benefits exceeding $5,250
These amounts must be added to Minnesota income.
New Subtractions Available
Minnesota added or continues to allow subtractions for several types of income, including:
- Court-determined coerced debt forgiveness
- Consumer enforcement public compensation payments
- Foreign service pension and retirement income
- Service Employees International Union (SEIU) stipend payments from the Minnesota Department of Human Services
- Certain critical access dental clinic student loan assistance payments exceeding $5,250
- Nursing Facility Workforce Wage Supplement Program payments
Other Legislative Changes
Minnesota notes that additional tax law changes were enacted during the 2026 legislative session. Taxpayers can review a complete summary by searching for "Tax Law Changes" on the Minnesota Department of Revenue website.