Posted: 12/22/04
Minnesotaís individual income tax brackets for tax year 2005 will expand by about two percent, the Minnesota Department of Revenue announced today. State law requires the department to adjust the brackets to compensate for increases in the annual inflation rate.
Expanding the brackets prevents taxpayers from being pushed into higher income tax rate brackets solely because of inflationary raises in their income. Since 1999, Minnesota's income tax brackets have expanded about 13 percent.
The inflation rate is measured by the change in the U.S. Urban Consumer Price Index for the average of 12 months ending August 1999 to the average of 12 months ending August 2004. The index measures annual inflationary changes in the cost of basic goods and services. The department adjusts the brackets by the inflation factor and rounds the result to the nearest $10.
The brackets apply to tax year 2005. Taxpayers who make quarterly payments of estimated tax should use this rate schedule to determine their payments, which are due starting in April 2005. Minnesotaís tax rates remain the same.
Minnesota 2005 Tax Rates and Income Brackets:
Married joint:
Rate; more than, but not more than 5.35 percent; $0;
7.05 percent; $29,070;
7.85 percent; $115,510
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Married separate:
Rate; more than, but not more than 5.35 percent; $0;
7.05 percent; $14,540;
7.85 percent; $57,760
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Head of household:
Rate; more than, but not more than 5.35 percent; $0;
7.05 percent; $24,490;
7.85 percent; $98,390
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Single:
Rate more than, but not more than 5.35 percent; $0;
7.05 percent; $19,890;
7.85 percent; $65,330
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