Updated July 2026 · 9 min read
Part of the Travel Nurse Tax Hub — browse every related guide in one place.
Minnesota pays travel nurses well and staffs some excellent hospital systems, but on the tax side it sits at the opposite end of the spectrum from the no-tax states. It runs one of the highest top income-tax rates in the country and it is aggressive about taxing every dollar of work income earned inside the state. The good news is that there is no city or county income tax layered on top, and the tax-free-stipend rules work exactly the way they do everywhere else — if you keep a legitimate tax home.
Minnesota taxes non-residents on income earned from work performed within the state, so your hourly taxable wages on a Minnesota contract are subject to Minnesota income tax regardless of where you call home. The rate is progressive across four brackets, climbing from around 5.35% at the bottom to 9.85% at the top. For a typical travel nurse taxable base rate (the taxable portion of your pay, not the stipends), most of your Minnesota-sourced income will land in the middle-to-upper brackets, so plan for an effective state rate meaningfully higher than a flat-tax state like Illinois or Arizona.
Because there is no city income tax, a Minneapolis or St. Paul contract is taxed the same as one in Rochester or Duluth — unlike Ohio or Pennsylvania, where the hospital's city can quietly add one to three points. In Minnesota the state rate is the whole story, which makes the math simpler even if the number is higher.
| Feature | Minnesota |
|---|---|
| State income tax | Progressive, ~5.35% to 9.85% |
| Local/city income tax | None |
| Non-resident return | Form M1 + Schedule M1NR |
| Reciprocity | North Dakota (and historically Michigan) only |
| Taxes stipends? | No — if you keep a legitimate tax home |
| Sales tax | ~6.875% state + local (clothing largely exempt) |
The reason a Minnesota contract can still pencil out despite the high rate is the same everywhere: your housing, meals, and incidentals stipends are tax-free reimbursements, not wages, as long as you are duplicating expenses away from a genuine tax home. Only your taxable base rate is exposed to Minnesota's 9.85% top bracket — the untaxed stipend portion never touches it. On a package where a large share of your pay comes through as stipends, the effective bite of even a high state rate is smaller than the headline suggests.
Minnesota has an income-tax reciprocity agreement with North Dakota (and has historically had one with Michigan). Reciprocity means a resident of the partner state who works in Minnesota pays income tax only to their home state, not to Minnesota. For the overwhelming majority of travel nurses — whose tax home is somewhere like Texas, Florida, or another distant state — reciprocity does nothing, and you'll simply file the Minnesota non-resident return. Only if you genuinely reside in North Dakota (or the specific partner state) does the agreement let you skip Minnesota withholding. Don't assume reciprocity applies just because you commute from a neighboring state; confirm your actual state of residence qualifies.
Expect Minnesota state tax to be withheld from your taxable wages on the assignment. At tax time you file Form M1 as a non-resident with Schedule M1NR, which apportions your income so Minnesota taxes only the portion earned in-state. You'll also file (or account for) your home state's return — and if your tax home is a no-income-tax state, there's no home-state wage tax to worry about, though you still can't get a credit to offset the Minnesota tax. Keep every contract, your stipend documentation, and proof of your tax home in case of an audit; high-tax states tend to scrutinize non-resident returns more closely.
Often, yes — but run the numbers on the whole package, not the hourly. The state rate is high, so a Minnesota assignment needs to pay enough (in taxable rate and stipends combined) to clear the extra state tax versus a no-tax state like Texas or Washington. Weigh in the cost of living, the strength of the health systems (the Twin Cities and Rochester are strong markets), and the fact that there's no city tax to compound the state rate. For a nurse chasing top total pay and good clinical experience, Minnesota can absolutely be worth it; for a nurse purely optimizing take-home, a no-tax state may net more on an otherwise-equal contract.
Related: Travel nurse tax guide · Tax home explained · California travel taxes · Highest-paying states
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