Tax & Accounting Blog

Minnesota Income Tax Rate Change Retroactive to January 1

1099, ONESOURCE, State Reporting, Tax Information Reporting June 5, 2013

Minnesota Governor Dayton signed the new omnibus budget bill HF 677 on May 23, enacting a compromise on income tax rates worked out in conference between the state House and Senate which had passed different versions of the bill. The newly approved income tax rate structure is retroactive to January 1, 2013, and changes affect more than employers because wage withholding rates are used for Minnesota withholding on retirement plan distributions and the supplemental rate applies to nonperiodical distributions. The Department of Revenue has not yet issued new withholding tables, computer formula, or a revised Income Tax Withholding Instruction Booklet, or published confirmation of the supplemental rate, backup withholding rate, and royalty withholding rate. The 2013 rates are now:

– 9.85 percent on Minnesota taxable income over $250,000 for married-filing-jointly filers; over $150,000 for unmarried filers; over $200,000 for head-of-household filers.
– 7.85 percent on income over $140,960 but not over $250,000 for married-filing-jointly; over $79,730, but not over $150,000 for unmarried; over $120,070, but not over $200,000 for head-of-household.
– 7.05 percent on income over $35,480 but not over $140,960 for married-filing-jointly; over $24,270 but not over $79,730 for unmarried; over $29,880 but not over $120,070 for head-of-household.
– 5.35 percent on the first $35,480 for married-filing-jointly; on the first $24,270 for unmarried; on the first $29,880 for head-of-household filers.

Editor’s Notes:
Marianne Couch has authored a number of blog posts on form changes related to FATCA regulations. Click here to view her post archive.

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