It depends. In Minnesota, Social Security Disability (SSA Disability) income is generally not included in your gross income for state tax purposes if it is not taxable at the federal level. Minnesota offers a means-tested income tax subtraction for Social Security benefits, including disability benefits. Here are the key details:
- For tax year 2024, the subtraction begins to phase out at $105,380 of adjusted gross income (AGI) for married joint returns and $82,190 for single/head of household returns
- If your AGI is below these thresholds, you may not pay state income tax on your Social Security benefits
- For most filers, a taxpayer’s subtraction is reduced by 10 percent for each $4,000 of AGI (or fraction of $4,000) above the phaseout.
- For example, a married taxpayer with $115,000 of AGI would receive a subtraction for 80 percent of the taxpayer’s federally taxable Social Security benefits because the taxpayer’s AGI is two increments (or partial increments) of $4,000 above $108,320.
For more details, check out TurboTax's Tax Tips & Articles and the Minnesota House Research
