9.85% top rate and the PTET just expired. Minnesota business owners need a new game plan for 2026.
With the PTET expiration, Minnesota business owners lost a key SALT cap workaround. Federal optimization and entity restructuring are now critical.
Beyond income tax, Minnesota business owners need to account for these additional tax obligations and structures.
These state-level incentives can meaningfully reduce your tax liability when properly claimed.
R&D credit (partially refundable through 2027: 19.2% in 2025, 25% in 2026-2027)
Angel Tax Credit
Job Creation Fund
Greater Minnesota Job Expansion Program
Border City Enterprise Zone credits
Opportunity Zones
Based on Minnesota's tax profile, these are the strategies with the highest impact for business owners.
Multi-entity structures can split income across favorable tax brackets and jurisdictions, reducing your effective rate.
Learn more →High earners in high-tax states can shelter $200K+ annually through properly designed defined benefit retirement plans.
Learn more →Proper S-Corp salary vs. distribution splits can save five figures annually on self-employment and state taxes.
Learn more →If you own commercial real estate or rental property, accelerated depreciation can generate massive year-one deductions.
Learn more →Choosing the right entity type is the foundation of tax savings. The wrong structure can cost you tens of thousands each year.
Learn more →We work with Minnesota business owners across these industries, each with unique tax planning opportunities.
Minnesota has a progressive income tax structure with a top marginal rate of 9.85%. Top rate of 9.85% on income over $193,240 (single). One of the highest progressive rates in the country. Effective planning can significantly reduce your actual tax burden.
Minnesota does not currently offer a pass-through entity tax election. Business owners should explore other strategies to manage their state and federal tax burden.
In a high-tax state like Minnesota, the most impactful strategies include entity restructuring, defined benefit retirement plans, cost segregation for real estate, and careful income timing. Most business owners are leaving $50K-$200K+ on the table.
Minnesota offers several valuable credits and incentives: R&D credit (partially refundable through 2027: 19.2% in 2025, 25% in 2026-2027), Angel Tax Credit, Job Creation Fund, and more. The state R&D credit is particularly valuable for businesses investing in innovation. Many of these go unclaimed because business owners don't know they qualify.
Our Tax Intelligence Framework engagement starts with a free assessment to identify your specific opportunities. Implementation pricing depends on complexity, but our clients typically see 5-10x return on their investment. A Minnesota business owner doing $1M+ in revenue commonly saves $50K-$200K+ in the first year alone.
Get a free assessment and we'll identify the state-specific opportunities hiding in your numbers.
Tell us about your business and we'll identify every savings opportunity available to you.