ThinkAdvisor highlights the five best and five worst states from a Kiplinger study on the tax environment for retirees. And guess what...we are number 2 on the worst list. Although this is probably not a surprise for most Minnesotan's it is still not fun to see.
Low-lights on why are we the worst:
Sales Tax: 6.87%
Income Tax: 5.35% to 9.85%
Social Security: Taxed at Federal Level
Property Tax Breaks for Seniors: People 65 or older with less than $60,000 in household income can defer part of their property taxes to the state. Interest will be charged and a lien will be attached to the property.
Tax on Inheritances and Estates: No inheritance tax, but estate taxes have an exclusion of $1 million. The maximum estate tax rate is 16%.
As a comparison, Alaska is the best:
Sales Tax: None (Some Municipal Tax)
Income Tax: None
Social Security Tax: None
Property Tax Breaks for Seniors: Homeowners over 65 and surviving spouses over 60 don’t have to pay municipal taxes on the first $150,000 of value on their property.
Tax on Inheritances and Estates: None
Special Treatment for Other Retirement Income: Retirement income is not taxed.