CPA for Minneapolis-St. Paul, MN Clients: Remote Tax, Payroll and Accounting

We are a Naperville, Illinois CPA firm, and we serve Twin Cities clients remotely; we have no office in Minnesota. Three things stand out in Minnesota: a top income tax rate of 9.85%, a state tax code that only recently updated its link to federal law and still departs from it in places, and an entity-level tax election available to pass-through owners. Property owners in Hennepin and Ramsey counties also deal with a spring valuation-notice cycle that has firm dates.

Minnesota income tax

The 2025 brackets run 5.35%, 6.8%, 7.85% and 9.85%. For a single filer the first bracket ends at $32,570, the second at $106,990 and the third at $198,630. For joint filers the 9.85% rate starts above $330,410. Our Minnesota page covers the 2026 figures and Social Security.

The more unusual point is conformity. Under the 2026 tax law (Minnesota Laws 2026, Chapter 128, signed May 27, 2026), Minnesota updated its conformity date to May 1, 2026. The Department of Revenue says this incorporates the 2025 federal law (H.R. 1) and that Minnesota decoupled from some of its provisions. Conformity is generally retroactive, and the Department says it will not adjust returns affected by the retroactive items, so affected taxpayers should plan to amend their returns when updated forms are available.

Two differences the Department lists: bonus depreciation on property other than qualified production property needs an 80% addition, with one-fifth subtracted in each later year, and domestic research expensing is allowed for most taxpayers but C corporations must add back 80% of the deduction. Check the Department's page before relying on any federal change for Minnesota.

Residency catches people who split time. You are a Minnesota resident if you spend at least 183 days in the state (any part of a day counts) and you or your spouse keep a year-round abode here, even if your permanent home is elsewhere. The 2025 filing minimum under that rule is $14,950 of Minnesota gross income. Minnesota's reciprocity agreements cover only Michigan and North Dakota, so a Wisconsin resident who works in the Twin Cities should confirm withholding and filing with the Department.

Large investment gains need a separate check. For 2025, individuals, estates and trusts owe a 1% Minnesota tax on Minnesota net investment income above $1,000,000, figured on Schedule NIIT.

Property valuations in Hennepin and Ramsey counties

Minnesota assigns market value as of January 2. Hennepin County mails valuation notices in March, and its informal options (calling the assessor, open book talks) run in April and May. Formal options follow in May and June, and the county board meets in mid-June. You must contact the county by the date printed on your notice to appear, and if your city holds no local board meeting you may go straight to the county board. Six cities handle their own assessing, so Minneapolis, Bloomington, Brooklyn Park, Eden Prairie, Minnetonka and St. Louis Park owners deal with the city assessor instead. Hennepin says all properties in the county are physically reviewed every five years.

Ramsey County asks owners to start with the County Assessor and says an appraiser should return your call within three days. A recent appraisal or sale of the property is the kind of evidence it names.

The Tax Court route is separate. The Department of Revenue's calendar lists April 30 as the last day to petition over a value that affects the current year's taxes. First-half taxes are due May 15 and second-half taxes October 15, and the property tax refund return (Form M1PR) is due August 15.

Sales tax differs sharply between the two cities. The Department's guide effective October 1, 2026 shows a combined general rate of 9.025% in Minneapolis and 9.875% in St. Paul.

Pass-through owners, researchers and employers

Partnerships, S corporations and LLCs taxed as either can elect to pay Minnesota tax at the entity level. The election is open for tax years beginning before January 1, 2028, must be made by the entity's extended due date, and cannot be revoked after the original due date. A qualifying group of owners holding more than 50% of the qualifying ownership must agree. The tax is figured at the top individual rate, currently 9.85%, and electing entities make four equal estimated payments for 2026. See our SALT deduction guide for why owners care.

For product developers, the state research credit is 10% of qualifying expenses up to a computed $2 million base amount and 4% above it, and the research must happen in Minnesota. A portion of the current-year credit is refundable on election: 19.2% for 2025 and 25% for 2026 and 2027. Our research credit guide explains the federal side. Employer registration and Paid Leave premiums are on the state page and in our payroll services.

The Indian-American community and US-India tax

The Minneapolis-St. Paul-Bloomington metro area has about 47,200 residents who identify as Asian Indian alone or in any combination (roughly 1.3%). Hennepin County has about 25,700 (2.0%) and Ramsey County about 4,600 (0.8%) (American Community Survey, 2020 to 2024). The Embassy of India lists Minnesota in the jurisdiction of the Consulate General of India in Chicago, effective July 15, 2025.

Families here commonly ask about:

• Reporting Indian bank accounts on the FBAR and Form 8938.
• Mutual funds that are PFICs and how they are taxed.
• NRE and NRO accounts, whose interest is reportable on the federal return whatever the account label.
• Selling property in India, which produces a gain that needs both federal and Minnesota reporting.

How we can help

We prepare federal and Minnesota returns, review where Minnesota departs from federal law, plan entity-level tax elections, and run payroll and bookkeeping for small employers, all remotely. We also help with IRS notices and with US-India reporting. If a matter requires a license in Minnesota or a local professional, we will say so.

Frequently asked questions

General information only, not tax, legal or accounting advice for your situation. Rules, limits and deadlines change; confirm the current rules with the official source or a qualified professional before you act. Reading this page does not create a professional relationship with CPA Tax Payroll and Accounting Corp.