Question 1

Is a bonus taxed higher in Minnesota?

Accepted Answer

No. Minnesota taxes a bonus as ordinary wages on your return, at the same rates as your salary. Withholding can look high because the employer applies a flat 6.25% for MN on top of the 22% federal flat rate and 7.65% Social Security and Medicare. Any difference between what was withheld and what you owe is settled when you file.

Question 2

What rate does Minnesota withhold on bonuses in 2026?

Accepted Answer

Minnesota withholds 6.25% on bonuses and other supplemental payments made separately from regular wages, regardless of allowances. If the bonus is listed separately in a regular paycheck, the employer may use 6.25% or the regular tables.

Minnesota Paid Leave premiums start in 2026; employees can be charged up to 0.44% of wages, bonuses included.

Source: Minnesota DOR, 2026 Withholding Instruction Booklet and Tax Tables, checked October 30, 2026.

Question 3

Can I reduce the withholding on my Minnesota bonus?

Accepted Answer

The most direct way is a 401(k) deferral from the bonus, if your plan allows it: the deferred part is not subject to federal income tax withholding or MN income tax withholding. When your employer uses the flat 22% federal rate, your Form W-4 does not change it; under the aggregate method it does. If you expect a large refund or bill, adjust your W-4 for the rest of the year rather than the bonus itself.

Question 4

Why was so much taken out of my bonus?

Accepted Answer

A bonus check usually loses 22% to federal income tax withholding, 7.65% to Social Security and Medicare, and your state's supplemental rate on top. That can add up to 30% to 40% of the bonus. The federal 22% and the state rate are withholding, not a separate bonus tax. When you file your return, the bonus is taxed as ordinary wages at your real bracket, and any over-withholding comes back as a refund.

Question 5

What is the federal bonus tax rate in 2026?

Accepted Answer

There is no separate federal bonus tax. For withholding, IRS Publication 15 (2026) lets employers withhold a flat 22% on supplemental wages such as bonuses and commissions, or add the bonus to a regular paycheck and use the normal tables (the aggregate method). Supplemental wages above $1 million in a calendar year must be withheld at 37%. Social Security (6.2% up to the $184,500 wage base) and Medicare (1.45%, plus 0.9% on wages above $200,000) apply as well.

Question 6

Does putting my bonus in a 401(k) lower the tax?

Accepted Answer

Yes, if your plan allows deferrals from bonuses. A traditional 401(k) deferral is not subject to federal income tax withholding, so the 22% applies only to the part you take as cash. Social Security and Medicare still apply to the full bonus. The 2026 employee deferral limit is $24,500 across all your paychecks, including any deferrals you already made this year.

Withheld	Flat rate	Aggregate
Federal income tax	$2,200	$2,812
MN income tax	$625	$876
Net bonus	$6,366	$5,503

State	2026 bonus withholding	Calculator
Minnesota	Flat 6.25%	This page
Iowa	Flat 3.8% (optional)	Iowa bonus tax
North Dakota	Flat 1.5% (optional)	North Dakota bonus tax
South Dakota	No state income tax	South Dakota bonus tax
Wisconsin	Flat 3.54% to 7.65% by annual salary (optional)	Wisconsin bonus tax

Minnesota Bonus Tax Calculator 2026

Withholding Breakdown

Flat Rate vs Aggregate Method

How Minnesota Withholds Tax on Bonuses in 2026

Is a Bonus Taxed Higher in Minnesota?

Bonus Withholding in States Near Minnesota

Minnesota Bonus Tax FAQ

More Pay Tools for Minnesota

Bonus Tax Calculators for Other States

Official References

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