The Minnesota Department of Revenue has shifted the state’s individual income tax brackets for next year based on inflation. For the 2018 tax year, the state’s tax brackets will change by about 2 percent from tax year 2017, the Department of Revenue said on Wednesday.
The adjustment does not change the Minnesota tax rate that applies to each income bracket. Since 1979, there has been an annual adjustment of the brackets to take into account inflation.
For example, for a single person, the income limit grew $500 to $25,890 to qualify for the lowest tax rate of 5.35 percent. The taxable income that pushes a single person into the top bracket, with a rate of 9.85 percent, increased $3,120 to $160,020.
Taxpayers who make quarterly payments on estimated taxes should use the new rate schedule to figure out payments, which are due starting next April. Under new federal tax law, both brackets and rates have changed. The Internal Revenue Service is likely to publish the schedule in February.