No Tax on Tips Calculator for Minnesota (2026)
Calculate how much Minnesota workers save now that tips are exempt from federal income tax under the OBBBA.
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Your Annual Tax Savings in Minnesota
Tips Tax Exemption in Minnesota
Under the One Big Beautiful Bill Act (OBBBA), workers in Minnesota who earn tips can deduct 100% of their tip income from federal income tax for tax years 2025 through 2028.
Minnesota Minimum Wage for Tipped Workers
The minimum wage in Minnesota is $11.13/hour. Minnesota does not allow a lower tipped minimum wage — all workers receive the full minimum wage regardless of tip income.
Top Tipped Industries in Minnesota
- Restaurant servers
- Bartenders
- Hotel staff
- Delivery drivers
State Income Tax Applies
Minnesota has a state income tax rate of 9.8%. While the OBBBA exempts tips from federal income tax, Minnesota may still tax tip income at the state level. Check with a local tax professional for details.
How the No Tax on Tips Law Works
What Qualifies
- Cash tips received directly from customers
- Credit/debit card tips
- Tips from tip pools or tip sharing
- Service charges distributed as tips
What Doesn't Change
- FICA taxes still apply: You still pay 6.2% Social Security + 1.45% Medicare on tip income
- Tips must still be reported: Report all tips to your employer and on your tax return
- Income limit: The exemption applies to workers earning less than $160,000 per year
Federal Calculators
Compare with the federal-level tools: Tip Tax Savings (Federal) | Overtime Tax Savings (Federal)