ST. PAUL, Minn. – Every year, the Minnesota Department of Revenue is required by law to adjust individual income tax brackets for inflation. For tax year 2014, the state’s individual income tax brackets will change by 1.696 percent from tax year 2013. Indexing for inflation of individual income tax brackets first began in 1979 and has continued every year since, except in 1989 and 1990.
This annual adjustment will prevent taxpayers from paying higher taxes solely because of inflationary changes in their income. The adjustment does not change the Minnesota tax rates that apply to each income bracket.
The bracket adjustments are based on the change in the U.S. Consumer Price Index for all urban consumers for the average of the 12 months ending August 2013 compared to the average of the twelve months ending August 2012. The department adjusts the brackets each year by the inflation factor and rounds the result to the nearest $10.
The brackets apply to tax year 2014. Taxpayers who make quarterly payments of estimated tax should use the following rate schedule to determine their payments, which are due starting in April 2014.
2014 Minnesota Income Tax Brackets Adjusted for Inflation
Marginal Tax Rates 5.35% 7.05% 7.85% 9.85%
Married, Filing Jointly $0—$36,080 $36,081—$143,350 $143,351—$254,240 $254,241 and over
Married, Filing Separately $0—$18,040 $18,041—$71,680 $ 71,681—$127,120 $127,121 and over
Head of Household $0—$30,390 $30,391—$122,110 $122,111—$203,390 $203,391 and over
Single $0—$24,680 $24,681—$81,080 $ 81,081—$152,540 $152,541 and over
The marginal tax rate is the rate of tax paid on a particular range of incomes.
