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2026 rules · verified against Minnesota's primary source
Minnesota fully exempts military retirement pay from state income tax.
Minnesota lets you subtract all taxable military retirement pay/pensions (unlimited) on Schedule M1M; an alternative $750 credit exists for lower-income vets but you can't take both.
Treatment
fully exempt
Top marginal rate
9.85%
Source: https://www.revenue.state.mn.us/military-pension-subtraction · verified July 2026
Estimated Minnesota state income tax on your military retirement, using the top marginal rate on the taxable portion (an upper bound; your effective rate is usually lower).
More Minnesota: all Minnesota veteran benefits · military retirement tax in every state · what your pension is worth