The 2026 picture for Minnesota residents
In 2026, Minnesota residents paid federal ordinary income tax at brackets topping out at 37%, plus Minnesota state tax up to 9.85%, plus Medicare (1.45% + 0.9% additional above $200k single MAGI), plus a federal supplemental-withholding layer on RSU-style income.
2026 AMT exemption
The 2026 federal AMT exemption was $88,100 for single filers. The exemption phased out at 25 cents per dollar of AMTI above $626,350, fully eliminating the exemption for higher earners. That is why ISO exercises in Minnesota during 2026 produced AMT bills that surprised people running first-order mental math.
Minnesota layer in 2026
Minnesota ran its own state AMT calculation in 2026, stacked on top of federal AMT. An ISO exercise that triggered federal AMT almost always triggered state AMT too, meaningfully increasing the total bill.
Frequently asked
- What supplemental-wage withholding rate applied to RSU income in Minnesota in 2026?
- The federal supplemental-wage withholding rate was 22% on the first $1,000,000 of supplemental wages per calendar year, rising to 37% above that. Minnesota state withholding ran up to 9.85% at the top bracket.
- Did Minnesota recognize federal QSBS exclusion in 2026?
- Minnesota's conformity status varies year by year and by type of taxpayer. As of 2026, most states other than California, New Jersey, Pennsylvania, and Mississippi either conformed fully or partially to Section 1202. Check the 2026 filing instructions for the specific language.
- What was the top federal ordinary bracket in 2026, and how did it apply to Minnesota residents?
- The 37% federal ordinary bracket started around $626,350 of taxable income for single filers in 2026. Minnesota stacked 9.85% on top of that for high earners, producing a combined top marginal rate of approximately 46.9%.