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Home Energy Tax Credit in Minnesota 2026

Calculate your home energy tax credit tax savings in Minnesota. With Minnesota's 9.85% top state tax rate, your combined savings are higher.

Minnesota Tax Overview

State Income Tax
9.85%
progressive
Sales Tax
6.875%
avg combined: 7.49%
Property Tax Rate
1.05%
Median Income
$77,706

Four brackets to 9.85% (5th highest). Estate tax ($3M). Clothing exempt from sales tax.

Minnesota Income Tax Brackets (Single)

5.35%
$0 - $31,690
6.8%
$31,690 - $104,090
Your bracket
7.85%
$104,090 - $193,240
9.85%
$193,240 +
$3,200
Est. Total Savings
$3,200
Max Deduction
Tax Credit
Deduction Type
28.8%
Combined Tax Rate

Home Energy Tax Credit Savings Calculator for Minnesota

$
$

Federal Savings

$3,200

22% bracket

Minnesota State

$0

6.8% rate

Total Savings

$3,200

28.8% combined

Tax credits reduce your tax bill dollar-for-dollar, regardless of your tax bracket.

Savings by Tax Bracket in Minnesota

10%
$5,000
12%
$5,000
22%
$5,000
24%
$5,000
32%
$5,000
35%
$5,000
37%
$5,000

Includes 6.8% Minnesota state tax on top of federal savings.

Eligibility Requirements

Homeowners who install energy-efficient improvements

  • 1Must be primary residence
  • 2Qualifying improvements only
  • 3Keep receipts

Minnesota residents should verify that this deduction is also recognized on their state tax return for additional savings of up to 9.85%.

Common Mistakes to Avoid

  • !Claiming for rental properties
  • !Missing manufacturer certifications
  • !Forgetting to claim the deduction on your Minnesota state return (missing up to 9.85% additional savings)

Minnesota Filing Tips

High rates make pre-tax contributions essential. Clothing is sales-tax-exempt. The $3M estate tax exemption is well below federal. K-12 education credit available.

Required Tax Forms

Form 5695

File these forms with your federal tax return to claim the home energy tax credit. Minnesota may require additional state-specific forms.

Other Tax Deductions in Minnesota

Mortgage Interest Deduction

Housing

~$4,582
est. savings

Property Tax Deduction

Housing

~$2,880
est. savings

Home Office Deduction

Housing

~$1,571
est. savings

Residential Solar Tax Credit

Housing

~$7,500
est. savings

Military Moving Expenses

Housing

~$5,236
est. savings

PMI Premium Deduction

Housing

~$1,440
est. savings

Mortgage Points Deduction

Housing

~$2,618
est. savings

Casualty & Theft Loss Deduction

Housing

~$6,545
est. savings

Home Energy Tax Credit in Neighboring States

Wisconsin

7.65% top rate (progressive)

~$1,800
-1,400 vs Minnesota

Iowa

3.8% top rate (flat)

~$1,800
-1,400 vs Minnesota

South Dakota

No state income tax

~$1,800
-1,400 vs Minnesota

North Dakota

1.95% top rate (flat)

~$1,800
-1,400 vs Minnesota

Tax Calculators for Minnesota Cities

MinneapolisSt. PaulSaint PaulRochesterDuluthBloomingtonBrooklyn ParkPlymouthMaple GroveWoodbury

Calculate Your Full Tax Savings in Minnesota

Use our free tax calculators to optimize your entire tax return for Minnesota.

Income Tax CalculatorMinnesota Income TaxFull Home Energy Tax Credit Guide

Frequently Asked Questions

How much can I save with the Home Energy Tax Credit in Minnesota?

In Minnesota, the home energy tax credit can save you an estimated $3,200 per year on a $5,000 deduction. This includes $3,200 in federal tax savings and $0 in Minnesota state tax savings at the 6.8% marginal rate. The national average savings is $1,800/year.

What is the Minnesota state income tax rate?

Minnesota has a progressive income tax system with a top rate of 9.85%. Four brackets to 9.85% (5th highest). Estate tax ($3M). Clothing exempt from sales tax.

Who qualifies for the Home Energy Tax Credit in Minnesota?

Homeowners who install energy-efficient improvements. The eligibility requirements are the same whether you live in Minnesota or another state, as this is a federal tax credit. However, your total savings will vary based on Minnesota's 9.85% top state tax rate.

What tax forms do I need to claim the Home Energy Tax Credit in Minnesota?

To claim the home energy tax credit, you need to file Form 5695 with your federal return. Minnesota residents should also check if the state allows this deduction on their state return for additional savings of up to 9.85%. Filing status affects your deduction limits and tax bracket.

Is the Home Energy Tax Credit better in Minnesota than in states without income tax?

Yes, Minnesota residents benefit more because the state's 9.85% top income tax rate means the deduction reduces both your federal AND state tax liability. In states with no income tax (like Texas, Florida, or Nevada), this deduction only reduces federal taxes. Your combined rate of 28.8% means more savings per dollar deducted.

What is the standard deduction in Minnesota for 2026?

Minnesota's standard deduction is $14,575 for single filers and $29,150 for married filing jointly. High rates make pre-tax contributions essential. Clothing is sales-tax-exempt. The $3M estate tax exemption is well below federal. K-12 education credit available.

Related Calculators

Mortgage Interest Deduction in Minnesota

Avg savings: $3,500/year

Property Tax Deduction in Minnesota

Avg savings: $2,200/year

Home Office Deduction in Minnesota

Avg savings: $1,200/year

Residential Solar Tax Credit in Minnesota

Avg savings: $7,500/year

Military Moving Expenses in Minnesota

Avg savings: $4,000/year

PMI Premium Deduction in Minnesota

Avg savings: $1,100/year