Minnesota Capital Gains Tax (2026)
Minnesota taxes capital gains as ordinary income on a graduated scale from 5.35% up to a top rate of 9.85%. Run your own numbers with the free capital gains tax calculator, which estimates federal, NIIT, and Minnesota tax together.
In short: federal long-term rates of 0%, 15%, or 20% apply everywhere. Minnesota adds state tax on top, at up to 9.85%.
How Minnesota treats capital gains
Minnesota taxes capital gains as ordinary income on a graduated scale from 5.35% up to a top rate of 9.85%. The estimate subtracts Minnesota's standard deduction ($15,300 single / $30,600 married).
2026 Minnesota income tax brackets
| Taxable income | Rate |
|---|---|
| $0 – $33,310 | 5.35% |
| $33,310 – $109,430 | 6.8% |
| $109,430 – $203,150 | 7.85% |
| Over $203,150 | 9.85% |
Single-filer taxable income. Married thresholds are doubled.
A worked example
Say you are a single filer in Minnesota with $60,000 of taxable income who sells stock held over a year for a $25,000 long-term gain. Federal tax on the gain is $3,750 (all of it lands in the 15% bracket at this income; no NIIT applies below $200,000 MAGI). Minnesota adds an estimated $1,700, for a combined $5,450, an effective 21.8% on the gain. These figures use the same math as the calculator, 2026 federal brackets per IRS Rev. Proc. 2025-32, and state figures from the Tax Foundation's State Individual Income Tax Rates and Brackets, 2026.
Frequently asked questions
Does Minnesota tax capital gains?
Yes. Minnesota taxes capital gains as ordinary income. Minnesota taxes capital gains as ordinary income on a graduated scale from 5.35% up to a top rate of 9.85%.
What will I pay on a long-term gain in Minnesota?
Combined, our worked example ($25,000 long-term gain on $60,000 of income, single) comes to $5,450: $3,750 federal plus $1,700 Minnesota tax, an effective 21.8%.
Do I still owe federal capital gains tax in Minnesota?
Yes. Federal capital gains tax (0%, 15%, or 20% long-term, ordinary rates short-term, plus the 3.8% NIIT for high earners) applies no matter your state. The free calculator estimates federal, NIIT, and Minnesota tax together.
More
- Every state's capital gains treatment
- Capital gains tax explained: short-term vs long-term
- Neighbors alphabetically: Michigan · Mississippi
This page is general information, not tax, legal, or financial advice. Rates and rules can change and depend on your situation. Confirm details with a tax professional, the IRS, or your state's revenue department.
← Back to the calculator