☰
✕
Sign In

Why sign in to the Community?

  • Submit a question
  • Check your notifications
Sign in to the Community or Sign in to TurboTax and start working on your taxes
Level 1
posted Feb 15, 2025 9:09:04 AM

Help me understand the non-resident state tax calculation

Hello,

 

I am living in Texas full time and have a rental property in Minnesota. I am filling for non-resident state tax for Minnesota.

 

The only income I have from Minnesota is my rental income, which is about $18,000 after deduction/credits.

 

Shouldn't my MN state tax be calculated only based on that rental income? It seems like I get taxed for my total federal gross income. My wages and salaries are not generated in MN.

 

 

 

 

0 1 1844
1 Replies
Expert Alumni
Feb 16, 2025 11:54:19 AM

The "Minnesota Bottom Line" can be bit confusing.  Minnesota calculates your taxable income as if it was all earned in Minnesota, for calculation purposes.  They only actually tax you on the part of that total income that is Minnesota income - in your case $18,587.  If you will notice, your Minnesota tax is only $878.  That is only 0.72% of your "Minnesota Taxable Income" of $121,348.  On the other hand, your tax is 4.72% of the income you actually earned in Minnesota.  They are only taxing your Minnesota rental income.