Does Minnesota have an estate tax? Yes, it does. Minnesota is one of about a dozen states that still charges its own estate tax. It is separate from the federal estate tax. That surprises many families, because the federal exemption is now very high.
However, Minnesota’s limit is much lower. For 2026, Minnesota taxes estates worth more than $3,000,000. A paid-off home, retirement accounts, and life insurance can add up faster than you might think. If you are planning ahead, or settling a loved one’s estate right now, this guide walks you through the basics. We will keep it simple, calm, and clear.
Does Minnesota Have an Estate Tax? What Families Need to Know
An estate tax is a tax on the total value of what someone owns when they die. That total is called the “estate.” It includes homes, bank accounts, investments, retirement accounts, business interests, and often life insurance. The tax is paid out of the estate itself before heirs receive their shares. As a result, the heirs do not pay it from their own pockets.
So, does Minnesota have an estate tax that most families will owe? In most cases, no. Only estates above $3,000,000 owe anything. The Minnesota Department of Revenue says the 2026 exclusion amount is $3,000,000. That figure is also the filing threshold. The rules are found in Minnesota Statutes chapter 291.
It also helps to know what Minnesota does not have. Minnesota has no inheritance tax. An inheritance tax is charged to the person who receives money. For example, a daughter who inherits $100,000 from her father in Minneapolis owes no Minnesota inheritance tax on it.
Minnesota Estate Tax Rules, Rates, and Exact Figures
When people ask “does minnesota have an estate tax,” they usually want the numbers. Here they are. Minnesota rates start at 13% and rise to a top rate of 16%. The tax applies only to the value above the exclusion. For example, an estate worth $3,500,000 is generally taxed on about $500,000, not the full amount.
| Item | Minnesota (2026) | Federal (2026) |
|---|---|---|
| Exclusion / exemption amount | $3,000,000 | $15,000,000 per person |
| Tax rates | 13% to 16% | Up to 40% |
| Return form | Form M706 | IRS Form 706 |
| Filing and payment deadline | 9 months after death | 9 months after death |
| Small business / farm deduction | Up to $2,000,000 (combined cap $5,000,000) | None |
| Gifts added back | Taxable gifts made within 3 years of death | Uses lifetime gift exemption |
| Inheritance tax | None | None |
There are a few special rules to know. First, Minnesota adds back certain taxable gifts made within three years of death. As a result, giving away money shortly before death may not lower the Minnesota tax. Second, qualified family farms and small businesses may get an extra deduction of up to $2,000,000. However, strict rules apply, and the heirs must typically keep the property in use for several years.
Third, Minnesota does not let married couples share unused exclusions. This is a key difference from federal law. Federal law allows “portability,” which means a surviving spouse can use a late spouse’s unused exemption. Minnesota does not allow this. Typically, property left to a spouse passes tax-free. However, the surviving spouse’s estate may then face a larger Minnesota tax later.
What about people who did not live in Minnesota? Does Minnesota have an estate tax for them too? It can. A nonresident who owned Minnesota real estate, like a lake cabin, may owe Minnesota estate tax. This depends on the total estate value and the Minnesota property’s share.
What to Do Next: Calm, Practical Steps
If you are settling an estate, start by listing everything the person owned. Write down rough values as of the date of death. Include the home, accounts, retirement plans, and life insurance. Then add any large gifts made in the last three years. If the total is under $3,000,000, Minnesota typically does not require Form M706.
If the total is close to or above $3,000,000, take a careful look. The executor usually files Form M706 within nine months of the death. An executor is the person named to manage the estate and pay its bills. Payment is generally due by the same deadline. The Department of Revenue posts the form and instructions on its website each year.
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If you are planning ahead, you may be able to reduce Minnesota estate tax with careful planning. Many families use trusts, lifetime gifts made well before death, or charitable giving. For example, a married couple may set up a trust so each spouse’s $3,000,000 exclusion gets used. These tools can be complex. As a result, it is wise to check with a licensed Minnesota estate planning attorney or tax professional. They can look at your full picture.
Finally, keep good records. Save statements, appraisals, and gift records. Clear paperwork makes the process smoother for everyone. It can also lower stress during an already hard time.
Frequently Asked Questions
Does Minnesota have an estate tax if the estate is under $3 million?
In most cases, no. For 2026, Minnesota estates at or below $3,000,000 generally owe no state estate tax. However, remember to count taxable gifts made within three years of death.
Do I have to pay tax on money I inherit in Minnesota?
Typically, no. Minnesota has no inheritance tax, so heirs do not pay state tax just for inheriting. However, inherited retirement accounts may create income tax when you withdraw money.
Does Minnesota have an estate tax that is the same as the federal one?
No, they are separate. The federal exemption is $15,000,000 per person in 2026, while Minnesota’s is $3,000,000. As a result, an estate can owe Minnesota tax but no federal tax at all.
Make Sure Your Plan Actually Works
A will or trust only does its job if the rest of your plan lines up. Two quick checks before you finish:
- Get your state’s exact rules — witnesses, notary, probate cost, and tax thresholds vary by state.
- Beneficiary forms beat your will — make sure your life-insurance beneficiaries are current, because named beneficiaries pass outside your will.
Sources & How to Verify
This guide is built from official sources. Always confirm the exact figure for your state:
- IRS — Estate & Gift Tax: irs.gov
- USA.gov — What to do when someone dies: usa.gov/death
- Uniform Law Commission (probate): uniformlaws.org
- Cornell Legal Information Institute: law.cornell.edu
- Your state’s probate court self-help portal and revenue department for the current statute and dollar figures.
Verified October 2026. Estate figures change — if you spot anything outdated, please contact us.
Related Guides
- Wills by State
- Trusts & Living Trusts by State
- Estate & Inheritance Tax by State
- Plain-English Estate Glossary
Disclaimer. This page is for general information only and is not legal or tax advice. Wills, probate, and estate-tax rules vary by state, county, and situation, and change over time. We are not a law firm, tax advisor, or financial planner, and we assume no liability for accuracy or completeness. For your specific situation — especially an active probate or a tax deadline — verify with your state’s court, statute, revenue department, or a licensed attorney in your state.