States / Minnesota
MN state income tax · checked October 14, 2026
Does Minnesota tax tips and overtime?
Yes. Minnesota taxes tips and overtime in full; the federal deductions don’t carry over to the Minnesota return.
| Minnesota return | Tips | Overtime |
|---|---|---|
| 2025 | Taxed | Taxed |
| 2026 | Taxed | Taxed |
The details
Minnesota starts from federal AGI, and bills to adopt matching state subtractions did not pass.
The federal deductions are taken after adjusted gross income, on Schedule 1-A, so a state that starts from federal AGI or computes its own income doesn’t pick them up unless its legislature adds a matching subtraction. We found no Minnesota law doing that for 2025 or 2026 as of October 2026.
The federal deductions apply either way. See who qualifies for no tax on tips, how the overtime deduction works, and where both go on Schedule 1-A.
States with the same 2026 treatment
All 50 states and D.C. · Michigan · Mississippi
Questions
Does Minnesota tax tips in 2026?
For 2026, Minnesota taxes tips in full.
Does Minnesota tax overtime in 2026?
For 2026, Minnesota taxes overtime in full.
What about my 2025 Minnesota return?
For 2025, Minnesota taxes tips in full. For 2025, Minnesota taxes overtime in full.
Does the federal deduction still apply?
Yes. Whatever your state does, you can still claim the federal deductions on Schedule 1-A if you qualify: up to $25,000 of qualified tips per return and up to $12,500 of qualified overtime ($25,000 joint), phasing down above $150,000 of MAGI ($300,000 joint).