Minnesota
Military Benefits

Military Pay & State Income Tax

Minnesota fully exempts military retirement pay from state income tax, along with National Guard pay, active duty pay earned while serving outside Minnesota, and all VA disability compensation.

Minnesota fully exempts military retirement pay from state income tax. Retired servicemembers who receive military retired pay do not owe Minnesota income tax on that income regardless of their length of service or when they retired. This applies to regular retired pay, disability retired pay, and SBP annuity payments. Report this income on your federal return and then subtract it on your Minnesota M1 form.

Minnesota National Guard pay is exempt from state income tax. This includes pay for drill weekends, annual training, and state activations. Guard members called to federal active duty also qualify for the active duty exemption on pay earned outside Minnesota. Contact the Minnesota Department of Revenue for guidance on mixed-year returns when you transition between duty statuses.

Active duty military pay earned while a servicemember is stationed or deployed outside Minnesota is exempt from Minnesota state income tax. If you are a Minnesota domiciliary serving entirely outside the state for the full tax year, your active duty pay is fully exempt. Servicemembers stationed within Minnesota who are legal MN residents may owe state income tax on that pay. File Minnesota Form M1 with Schedule M1M to claim the active duty pay subtraction.

VA disability compensation at any rating from 0% to 100% is fully exempt from Minnesota state income tax. This is a federal exemption that Minnesota automatically honors. No separate state form is required. Simply exclude VA compensation from reported gross income on your Minnesota return. Combat-related special compensation (CRSC) and concurrent retirement and disability pay (CRDP) follow the same treatment.

Military spouses who maintain domicile in another state are not subject to Minnesota income tax on wages earned in Minnesota while accompanying their servicemember on military orders under the Veterans Benefits and Transition Act of 2018. File Minnesota Form M1 with a domicile statement. If Minnesota income taxes were withheld by an MN employer, you are entitled to a full refund. Contact the Minnesota Department of Revenue at 651-556-3000 for assistance.

Property Tax Exemptions & Credits

Minnesota provides a full property tax exemption for 100% permanently and totally disabled veterans, strong surviving spouse protections, and a homestead credit refund for lower-income veterans.

Minnesota Statutes Section 273.13 provides a full property tax exemption on the primary residence of veterans who are rated 100% permanently and totally disabled by the VA. The property must be the veteran's primary residence and must be owned and occupied by the veteran. Apply through your county assessor by December 31 for the following tax year. Bring your VA award letter documenting the 100% P&T rating and proof of primary residence.

The surviving spouse of a 100% P&T disabled veteran retains the full property tax exemption as long as they remain unmarried and continue to occupy the property as their primary residence. The surviving spouse does not need to meet any separate disability requirement. The exemption transfers automatically based on the veteran's prior VA rating. Contact your county assessor to update the ownership documentation after the veteran's death.

Minnesota's homestead credit refund program provides property tax relief to lower-income homeowners, including veterans and military families. The refund is based on a percentage of property taxes that exceed a portion of household income. Veterans with limited income who do not qualify for the 100% P&T exemption may benefit significantly from this program. File Minnesota Form M1PR by August 15 of the following year.

Veterans with service-connected disability ratings between 70% and 99% may qualify for a market value exclusion that reduces the taxable value of their home. The exclusion amount scales with the disability rating. At 70%, a portion of market value is excluded; at 100% (non-P&T), a larger portion is excluded. Contact your county assessor for the current exclusion schedule and application deadlines.

Military Spouse Employment & Licensing

Minnesota provides professional license reciprocity for military spouses following PCS orders, along with unemployment compensation protections for spouses who leave jobs to accompany a servicemember on a move.

Minnesota law provides expedited professional license reciprocity for military spouses who hold a valid license in another state and relocate to Minnesota due to the servicemember's military orders. Covered professions include nursing, real estate, counseling, social work, physical therapy, occupational therapy, cosmetology, and others regulated by Minnesota licensing boards. Submit your application with a copy of the servicemember's current orders and your out-of-state license documentation.

Minnesota provides unemployment compensation eligibility for military spouses who voluntarily leave employment to accompany their servicemember on a PCS move. Leaving for a PCS is treated as a qualifying reason and is not considered a voluntary quit without good cause. File with the Minnesota Department of Employment and Economic Development at 651-259-7114 or uimn.org promptly after job separation. Keep a copy of the PCS orders with your claim documentation.

Military spouses who maintain out-of-state domicile and work remotely for an out-of-state employer while living in Minnesota due to military orders are generally not subject to Minnesota income tax on those wages under the VBTA 2018. Minnesota-source income from MN employers or MN-based businesses may still be taxable. Consult a military-aware tax professional for situations involving multiple income sources.

SCRA, Federal Protections That Apply in Minnesota

The Servicemembers Civil Relief Act provides a full suite of financial and legal protections for active duty servicemembers and their families in Minnesota, including lease termination rights, the 6% interest cap, foreclosure protection, and eviction stays.

Federal SCRA allows active duty servicemembers to terminate a lease with 30 days' written notice upon receiving PCS orders or deployment orders for 90 days or more. Deliver notice via certified mail with a copy of orders. The lease terminates 30 days after the next rent payment due date following delivery of notice. Minnesota landlords cannot charge early termination fees or penalties for SCRA-qualifying lease terminations.

Any debt incurred before entering active duty, including mortgages, auto loans, credit cards, and student loans, must be reduced to a maximum 6% annual interest rate upon written request with a copy of orders. The rate reduction is retroactive to the date active duty began, and excess interest above 6% is forgiven, not deferred. Submit your request in writing via certified mail and keep a copy for your records.

Federal SCRA prohibits mortgage lenders from foreclosing on a servicemember's primary residence without a court order during the period of active duty service and for 12 months after separation. If a lender attempts non-judicial foreclosure, you may petition a Minnesota court to stay the proceedings. Contact your installation JAG office immediately if you receive foreclosure notice while on active duty.

Minnesota landlords cannot evict an active duty servicemember or their family from a primary residence without a court order when rent is at or below the SCRA threshold (approximately $4,036.20 per month in 2024, adjusted annually for inflation). The court may also stay eviction proceedings for up to 90 days if military service materially affects the servicemember's ability to pay. Contact installation JAG for immediate assistance if you receive an eviction notice.

SCRA allows servicemembers to request a stay of civil court proceedings, including lawsuits, divorce proceedings, and contract disputes, when military service prevents them from appearing. Courts must grant at least a 90-day stay if the servicemember can demonstrate that service materially affects their ability to appear. Default judgments entered without SCRA compliance can be reopened.

Education Benefits in Minnesota

Minnesota offers the state-funded Minnesota GI Bill, a National Guard tuition waiver at state universities, strong in-state tuition protections for active duty families, and robust Yellow Ribbon participation at Minnesota private colleges.

The Minnesota GI Bill provides up to $10,000 in financial assistance for eligible veterans, National Guard members, and reservists to use toward tuition and fees at Minnesota colleges and universities. Eligibility requires honorable discharge and at least 181 days of active duty service after September 11, 2001, or service in a combat zone. Benefits are administered by the Minnesota Office of Higher Education. Apply at ohe.state.mn.us.

Minnesota National Guard members on active state service may qualify for a tuition waiver at Minnesota state universities and community colleges within the Minnesota State Colleges and Universities system. The waiver covers tuition costs at participating MnSCU institutions. Contact the Minnesota National Guard Education Services Officer and the financial aid office at your chosen institution. Availability and terms are subject to legislative funding.

Active duty servicemembers stationed in Minnesota, their spouses, and dependents are eligible for in-state tuition at Minnesota public colleges and universities without a 12-month residency waiting period. This applies to University of Minnesota campuses, Minnesota State University campuses, and Minnesota community and technical colleges. Present current military orders to the registrar at enrollment.

Multiple Minnesota colleges and universities participate in the Yellow Ribbon Program, which provides additional funding beyond the Post-9/11 GI Bill cap for veterans attending private institutions or out-of-state programs. Participating schools in Minnesota include the University of St. Thomas, Hamline University, Augsburg University, and others. Verify current participation and award amounts directly with each school's veterans services office, as participation can change annually.

All Minnesota public colleges and universities accept Post-9/11 GI Bill benefits. The University of Minnesota has a dedicated veterans services office at 612-624-1990. Minnesota State University Mankato, St. Cloud State University, and other MnSCU institutions have School Certifying Officials (SCOs) who can process GI Bill benefits. Apply for benefits at VA.gov and contact the SCO at your institution before the semester begins.

Veterans Hiring Preference

Minnesota provides veterans preference points on civil service examinations and absolute preference for certain positions, giving eligible veterans a meaningful advantage in state and local government hiring.

Minnesota Statutes Chapter 43A provides veterans preference to eligible veterans applying for state and local government positions. Veterans who pass a civil service examination receive additional points added to their score. Disabled veterans receive a larger preference. The preference applies to initial appointment and some promotional examinations. Eligible veterans include those with honorable discharges from active military service.

For certain state and local government positions, disabled veterans with a service-connected disability rating may receive absolute preference, meaning they must be appointed over non-veteran finalists if they are qualified for the position. This is a stronger protection than points-based preference. Contact the Minnesota Department of Human Services or the specific hiring agency to confirm whether a position carries absolute preference.

The surviving spouse of a veteran who died during active duty service or from a service-connected disability may be entitled to veterans preference in state employment under Minnesota law. Contact the Minnesota Department of Veterans Affairs at 651-757-1565 to confirm eligibility and documentation requirements.

Legal Protections for Military Members

Minnesota servicemembers benefit from the full suite of SCRA protections, VBTA 2018 spouse domicile rights, and UOCAVA absentee voting protections that preserve your legal rights regardless of where you are stationed.

The Servicemembers Civil Relief Act applies in full in Minnesota. This includes the interest rate cap, lease termination, foreclosure protection, eviction stay, civil court stays, life insurance protections, and professional license deferral. Minnesota courts and landlords are required to comply. If you believe your SCRA rights are being violated, contact your installation JAG office immediately or the Consumer Financial Protection Bureau at 855-411-2372.

The Veterans Benefits and Transition Act of 2018 allows military spouses to use the same state of domicile as their servicemember for tax and voting purposes, regardless of where the couple is currently stationed. In Minnesota, this means a military spouse can claim MN domicile for income tax purposes even if the servicemember is a domiciliary of another state, or vice versa. The spouse's domicile election is independent of the servicemember's.

The Uniformed and Overseas Citizens Absentee Voting Act protects the right of active duty servicemembers and their families to vote in federal elections via absentee ballot in their state of domicile. Minnesota servicemembers may maintain MN voter registration and request absentee ballots through the Federal Post Card Application (FPCA) at FVAP.gov. Each installation has a Voting Assistance Officer who can help complete the FPCA at no cost.