Minnesota 2025 Income Tax: Four Brackets Stay; HF812 Not Enacted

(MINNESOTA) Minnesota’s 2025 individual income tax remains a point of surprise for many new arrivals: the state still uses four progressive brackets from 5.35% to 9.85%, and the high-profile “zero bracket” idea in HF 812—which would have made the first slice of income tax-free—has not become law as of late 2025. For immigrants, international students, and out-of-state hires moving to the Twin Cities or beyond, that simple fact matters right away because it affects paycheck withholding, rent and loan approvals based on after-tax income, and the tax records that often show up in immigration files.

This is a practical, step-by-step walk-through of what to do from your first day in Minnesota through tax filing season, with realistic timeframes and clear checkpoints so you don’t get caught by under-withholding or missed credits.

First week in Minnesota: figure out what Minnesota will tax

Start by separating two ideas that often get mixed up: your immigration status (F-1, H-1B, TPS, green card, and so on) and your Minnesota tax status (resident, part-year resident, or nonresident). Minnesota can treat you as a resident for tax even if you are not a “resident” under federal immigration law.

In plain terms:

• Minnesota generally treats you as a resident for income tax if Minnesota is your main home, or if you spend more than 183 days in the state and keep a place to live there.
• If you moved mid-year, you may be a part-year resident.
• If you live elsewhere but earn Minnesota-source wages, you may be a nonresident who still owes Minnesota tax on that Minnesota income.

If you want the official rules, the Minnesota Department of Revenue explains residency and filing basics, and provides the state return materials on its Individual Income Tax page. Keep that page bookmarked, because it’s also where annual bracket tables and filing instructions get posted.

Week two: set expectations about the bracket rates (and what they do not mean)

Minnesota uses a progressive system. That means you do not pay 9.85% on all your income just because your salary crosses a higher bracket. You pay each rate only on the portion of income that falls inside that band.

For Minnesota’s 2025 individual income tax, the rates still in place are:

• 5.35%
• 6.80%
• 7.85%
• 9.85%

The income cutoffs move a bit each year due to inflation adjustments. Early planning ranges discussed publicly for single filers have put the first bracket up to about $32,570, then rising through upper brackets, with the top rate applying above about $198,630. Married couples filing jointly generally get roughly doubled thresholds, designed to reduce a “marriage penalty,” but the exact cutoffs come from the annual state tables.

If you’re budgeting for rent, childcare, or a car payment, this is where many newcomers make a mistake: they hear “progressive” and assume the first part of income is tax-free. In Minnesota, that is not true under current law.

What happened to HF 812, and why immigrants should care

House File 812 (HF 812) was introduced in the 2025–2026 Minnesota legislative session with the title “Individual income tax rates modified, and zero bracket provided.” The core idea was a new “zero bracket,” meaning the first slice of income would face a 0% state rate.

Public discussion described amounts such as the first $32,700 for single filers (often rounded from $32,570) and about $47,620 for married filing jointly. Supporters framed it as relief for lower-wage workers and as a way to make Minnesota compete with lower-tax states.

Opponents pointed to revenue loss estimates in the $3.7–$3.8 billion range and argued that the tradeoff could mean pressure on funding for schools, health care, or local aid.

The critical point for your planning: HF 812 died in committee in 2025 and did not pass. There is no zero bracket in effect for tax year 2025. So if you reduce withholding because you “heard the first $32,700 is tax-free,” you can end up owing money in April, plus possible penalties and interest.

According to analysis by VisaVerge.com, this kind of stalled tax-cut proposal tends to create confusion for newcomers because employers’ withholding systems follow enacted law, not campaign ideas or bill summaries.

Key takeaway: treat the “zero bracket” as a proposal that did not become law — plan withholding and budgeting on the current four brackets (5.35%–9.85%).

Your first paycheck: confirm Minnesota withholding is actually happening

Within your first month on a Minnesota payroll, look at your pay stub and confirm there is a line for Minnesota state income tax withholding.

• If you work multiple jobs, have taxable scholarship income, or do gig work on the side, you may need extra withholding or quarterly estimated payments to avoid a surprise bill.
• Because the “zero bracket” did not pass, your wages generally start in the 5.35% bracket, and then portions move into higher brackets as income rises.

If you are a new worker on a visa and your employer is unfamiliar with your situation, don’t assume payroll got it right. Ask, document the answer, and save the emails. Also keep every pay stub — immigration cases often require proof of steady work and consistent earnings, and pay stubs help match what you report on tax returns.

First two months: lock in your tax ID (SSN or ITIN) so you can file

You generally need a U.S. tax identification number to file state and federal returns.

• If you are authorized to work, you typically apply for a Social Security Number (SSN).
• If you cannot get an SSN but still must file a tax return (for example, some dependent spouses or children), you may need an Individual Taxpayer Identification Number (ITIN).

The ITIN application is handled through the IRS using Form W-7. You can read the requirements and download the form from the IRS’s official page for Form W-7, Application for IRS Individual Taxpayer Identification Number. Timing varies, but many people should plan for weeks, not days—especially if they apply during peak filing season.

Mid-year check (June–August): build a records folder that serves both taxes and immigration

By summer, set up a simple folder system (paper or digital) and keep:

• W-2s and/or 1099s (when they arrive)
• Year-to-date pay stubs
• Rent receipts or a landlord statement (helpful for Minnesota renter-related refunds)
• Childcare and school expense records if relevant
• Notes about days spent inside and outside Minnesota if your residency status is not clear

This is not just “tax prep.” Tax compliance can affect immigration outcomes. Officers often compare what you claimed on immigration forms with what you reported to tax agencies.

For example, naturalization asks detailed questions about compliance and good conduct. If you apply for citizenship, you may end up relying on your tax history as part of your record. USCIS explains the naturalization process and links to the application on its official Form N-400, Application for Naturalization page.

Filing season (January–April): file Minnesota’s return correctly and on time

For most filers, the deadline falls in mid-April, aligning with the federal schedule. Minnesota generally allows you to request extra time to file, but any tax you owe is still due by the original deadline.

Most Minnesota residents with enough income will file the state individual return, commonly known as Form M1. The Minnesota Department of Revenue provides current-year forms and instructions through its official site, including the Form M1 materials on the Minnesota individual income tax forms page.

If you are a part-year resident or nonresident:

• Be careful with which form and schedules you use.
• Be clear about what income is Minnesota-source.
• If your situation includes foreign income or multiple states in the same year, consider a preparer experienced with immigrant and cross-border cases.

Credits and refunds that can matter a lot for new arrivals

Minnesota’s base tax rates are only part of the story. Credits and refunds can change your final bill, sometimes dramatically for families and lower-wage workers.

Commonly important items:

• Homestead Credit Refund (Property Tax Refund / Renter’s Refund)
  • Eligibility rules tie to household income. Guidance indicates income must generally be under about $142,490 to qualify in 2025.
  • If you qualify, it can return meaningful cash, but only if you file and report income correctly.
• Education-related items (including certain K–12 expenses)

• Work- and child-related credits that reduce tax owed for lower- and moderate-income households

Eligibility details vary by year and household facts, so use the state’s official instructions each filing season rather than relying on old blog posts.

How this ties back to immigration cases: avoid gaps, contradictions, and panic

For many immigrants, the safest rule is: if you are required to file, file every year you are here, even if your immigration case is pending, even if you changed jobs, and even if you are worried you made a mistake in the past. Fixing problems early is usually easier than explaining years of missing returns later.

Minnesota tax returns can support or complicate:

• Family-based cases where a sponsor’s income must meet a threshold
• Employment-based filings where wage history matters
• Naturalization cases where missing returns can raise questions

If you fear you under-withheld because you assumed HF 812 passed, don’t wait. You can:

1. Adjust withholding now with your employer.
2. Set aside money each paycheck for potential tax due.
3. File accurately when the season opens — and correct past mistakes early if needed.

Minnesota’s current law is still built around four progressive brackets from 5.35% to 9.85%, and Minnesota’s 2025 individual income tax planning is safest when you treat the “zero bracket” as what it is today: a proposal that did not become law.