Capital Gains Tax for Minnesota (2026)
Minnesota (MN) Key Facts
State Capital Gains Rate
9.85%
Taxed As
Ordinary income
Federal Rate Applies
Yes (0%, 15%, or 20%)
Long Term vs Short Term
Both taxed at state level
How This Calculator Works in Minnesota
This calculator estimates your combined federal and Minnesota capital gains tax. Enter your gain amount, holding period, and income to see your estimated tax.
Minnesota Overview
Minnesota taxes capital gains as ordinary income at up to 9.85%, one of the highest rates in the nation. Federal capital gains taxes also apply, with long-term rates of 0%, 15%, or 20% depending on income. The combined state and federal burden should be considered when planning asset sales or investment strategies.
How Minnesota Compares
Minnesota's capital gains rate of 9.85% compares to Wisconsin at 7.65% and Iowa at 5.7%. State capital gains taxes significantly impact net investment returns.
| State | Top Rate | Notes |
|---|---|---|
| Wisconsin | 7.65% | Wisconsin has a capital gains rate of 7.65%. |
| Iowa | 5.7% | Iowa has a capital gains rate of 5.7%. |
| North Dakota | 1.95% | North Dakota has a capital gains rate of 1.95%. |
Minnesota's capital gains rate of 9.85% compares to a national average of approximately 5.04%. This is above the national average.
Tips for Minnesota Residents
- 1Minnesota taxes capital gains as ordinary income at up to 9.85%, one of the highest rates in the nation.
- 2Federal long-term gains (held 1+ year) are taxed at 0%, 15%, or 20%. Minnesota's state tax applies on top of the federal rate.
- 3Hold investments over one year to qualify for lower federal long-term rates rather than ordinary income rates.
- 4Tax-loss harvesting—selling losing investments to offset gains—reduces both federal and Minnesota state capital gains tax.
- 5Consider the combined federal + state rate when planning large asset sales. The total can exceed 33.6% for high earners.