Minnesota stock-comp tax reference
Top marginal rate, supplemental withholding, AMT status, and capital-gains treatment for RSU, ESPP, and ISO income earned by Minnesota residents.
Tax year 2026 · Last updated May 10, 2026
Top marginal income tax rate
9.85%
Supplemental withholding rate
Uses top marginal rate
State personal AMT (impacts ISO)
Yes
LTCG treatment
Taxed as ordinary income
How it works
Note: Minnesota retains a personal AMT (Schedule M1MT) at 6.75% that can apply to ISO exercises.
RSU vests
RSU vests are W-2 supplemental wages in Minnesota, withheld at the top marginal rate (9.85%) by default. Reconciled at filing against your actual marginal rate — same shortfall mechanics as federal.
ESPP qualifying dispositions
Minnesota taxes both the ordinary-income piece (the §423(c) discount) and the long-term capital gain at ordinary rates. Federal qualifying-disposition rules still split the gain into ordinary income and LTCG; state treatment is layered on top.
ISO exercises
Minnesota imposes a state-level AMT that can apply to ISO bargain element on top of federal AMT. Plan for additional state AMT in addition to the federal calculation.
Frequently asked questions
Does Minnesota have a state income tax on RSU vests?
Yes. Minnesota's top marginal rate is 9.85%. RSU vests are W-2 wages and follow normal state withholding + reconciliation.
What supplemental withholding rate does Minnesota use for RSUs and bonuses?
Minnesota does not publish a separate supplemental rate; employers typically default to the state's top marginal rate (9.85%).
Does Minnesota have a state AMT for ISO exercises?
Yes — Minnesota retains a personal AMT that can layer on top of federal AMT for ISO exercises. Confirm current-year mechanics with the Minnesota Department of Revenue.
How does Minnesota tax long-term capital gains?
Minnesota taxes long-term capital gains at the same rates as ordinary income — no preferential LTCG rate.
Where is this information sourced?
Top marginal rates are from the Tax Foundation 2025 state individual income tax brackets summary. State supplemental rates are from the published guidance of each state's revenue department (linked above). Personal AMT status reflects 2025 legislation. Always confirm current-year rules with the Minnesota Department of Revenue before making decisions.
Is this tax advice?
No. This is a planning reference — state tax law changes frequently and varies by individual situation. Talk to a CPA licensed in Minnesota for advice on a real transaction.