Minnesota Estate Tax: Everything You Need to Know

What You Need to Know About the Minnesota Estate Tax

The estate tax rate in Minnesota ranges from 13% to 16%. In 2024, it applies to estates worth more than $3 million. This guide gives a full explanation of the estate tax in Minnesota, so you know what to expect when estate planning. If you think you’ll need help, you may want to consider working with a financial advisor.

Minnesota Estate Tax Exemption

The threshold for the estate tax in Minnesota is $3 million in 2024. Any wealth below the exemption is not taxed by the state. Wealth above that mark is taxed in a series of progressive brackets.

Minnesota Estate Tax Rate

Minnesota’s estate tax is graduated, with a series of increasing rates applying as the size of the estate goes up.

Once you know your taxable estate, find your bracket in the table below. The base taxes shows what’s owed on wealth that falls below your bracket. Next, subtract the bottom limit of your bracket from your taxable estate. Multiply that by the marginal rate. Finally, add that amount to the base taxes owed, and you’ll know the total tax burden.

Let’s go over an example: Say your total estate is worth $15.1 million, and with the $3 million exemption, the taxable estate totals $12.1 million. Then look for where that total falls on the chart below. Since that places your estate in the highest bracket, the base tax is $1.355 million. After that, we subtract the bottom of the threshold, which is $10.1 million, making the leftover taxable amount $2 million. That is then multiplied by the marginal rate of 16%, making the final tax $320,000. That $320,000 sum plus the base tax of $1.355 million equals a total Minnesota estate tax burden of $1.675 million.

Minnesota Estate Tax Rates

Taxable Estate*	Base Taxes Paid	Marginal Rate	Rate Threshold**
$1 – $7.1 million	$0	13%	$0
$7.1 million – $8.1 million	$923,000	13.6%	$7.1 million
$8.1 million – $9.1 million	$1.059 million	14.4%	$8.1 million
$9.1 million – $10.1 million	$1.203 million	15.2%	$9.1 million
$10.1 million and above	$1.355 million	16%	$10.1 million

*The taxable estate is the total above the 2024 exemption of $3 million.
**The rate threshold is the point at which the marginal estate tax rate goes into effect.

What Is the Estate Tax?

Estate taxes are levied on the estate of a recently deceased person before the money or other property is passed on to heirs. It is sometimes called the “death tax,” and applies to estates worth a particular amount, which varies by jurisdiction.

Don’t confuse the estate tax with inheritance taxes, which are taken from a person’s heirs after the money has passed on to them.

Minnesota Inheritance Tax

There is no inheritance tax in Minnesota. Inheritance taxes from other states could apply to you, though. In Kentucky, for instance, all in-state property that is passed down is subject to the inheritance tax, even if the inheritor lives elsewhere.

Minnesota Gift Tax

Minnesota also has no gift tax, so you’ll only be subject to the federal gift tax. The federal gift tax exemption is $18,000 for each recipient in 2024, up from $17,000 in 2023. Any amount to a single person over that limit in a year will count against your 2024 lifetime exemption of $13.61 million, which is higher than the $12.92 million exemption for 2023.

Minnesota Estate Tax for Married Couples

The Minnesota estate tax is not portable for married couples. When both spouses die, only one exemption of $3 million can be applied.

Federal Estate Tax

On top of the Minnesota estate tax, there is the federal estate tax – but it has a much higher exemption. In 2024, the federal exemption is $13.61 million. This means that with the correct legal maneuvering, a couple can protect up to $27.22 million from the federal estate tax after both spouses have died.

The top tax rate is 40%. Use the method described in the Minnesota Estate Tax Rates section and the chart below to figure out your federal estate tax burden.

Federal Estate Tax Rates

Taxable Estate*	Base Taxes Paid	Marginal Rate	Rate Threshold**
$1 – $10,000	$0	18%	$1
$10,000 – $20,000	$1,800	20%	$10,000
$20,000 – $40,000	$3,800	22%	$20,000
$40,000 – $60,000	$8,200	24%	$40,000
$60,000 – $80,000	$13,000	26%	$60,000
$80,000 – $100,000	$18,200	28%	$80,000
$100,000 – $150,000	$23,800	30%	$100,000
$150,000 – $250,000	$38,800	32%	$150,000
$250,000 – $500,000	$70,800	34%	$250,000
$500,000 – $750,000	$155,800	37%	$500,000
$750,000 – $1 million	$248,300	39%	$750,000
Over $1 million	$345,800	40%	$1 million

*The taxable estate is the total above the exemption of $13.61 million.
**The rate threshold is the point at which the marginal estate tax rate kicks in.

Overall Minnesota Tax Picture

Minnesota is not a particularly tax-friendly state for retirees. Social Security income is partially taxed and income from retirement accounts and pensions is fully taxed. Minnesota’s income tax rate is progressive, with rates ranging from 5.35% to 9.85%. These are among the highest in the country. On the other hand, Minnesota property tax rates average 1.11%, which is above to the national average. The statewide sales tax is 6.875%, and local sales taxes can be up to 2%.

You can use this Minnesota paycheck calculator to estimate your take home pay in the North Star State.

Estate Planning Tips

If you think you need help with estate planning or other financial planning questions, a financial advisor can help. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
One major part of planning your estate is writing a will. Make sure you work with a lawyer to avoid common will mistakes like not following all the rules, not naming an executor for your estate or not naming a guardian for any minor children.