How is crypto taxed in Minnesota?

Minnesota crypto tax follows the federal treatment of crypto as property, then applies the state's graduated income tax. Selling, swapping or spending crypto can create a capital gain, and crypto received as pay, mining or staking rewards is income. Minnesota has no lower rate for long-term gains, and very large gains can trigger an extra investment income tax. The federal rules are in how crypto is taxed in the US.

How is crypto taxed in Minnesota?

Line 1 of Form M1 is federal adjusted gross income. Crypto gains on federal Schedule D and crypto income on Schedule 1 are already inside that number, so they carry onto the Minnesota return. The 2025 instructions reviewed do not set out a separate crypto rule or a lower capital gains rate.

For 2025, the Department of Revenue lists four brackets. For single filers, 5.35% applies up to $32,570, 6.80% up to $106,990, 7.85% up to $198,630 and 9.85% above that. For married couples filing jointly, the top rate starts above $330,410. The 2025 standard deduction is $14,950 for single filers and $29,900 for joint filers.

What is the Minnesota net investment income tax?

It is a separate 1% tax on net investment income above $1 million, for tax years beginning after December 31, 2023. It applies to individuals, estates and trusts, and nonresidents pay on the share allocated to Minnesota. The base starts from federal net investment income, which includes capital gains, interest and dividends, minus a few Minnesota exclusions such as gains on certain agricultural land. It is figured on Schedule NIIT and attached to Form M1.

So a resident who sells crypto for a very large gain can owe Minnesota's top income tax rate plus this 1% on the investment income above $1 million.

Is there sales tax on crypto in Minnesota?

The department says alternate forms of currency used to buy goods or services, including cryptocurrency, are treated the same as cash for sales tax. Paying with crypto is still a disposal for federal income tax, which can create a gain or loss. See is there sales tax on crypto.

What are Minnesota's crypto laws?

The biggest 2026 change is the crypto kiosk ban. Under Laws of Minnesota 2026, chapter 65, installing, operating or offering virtual currency kiosks has been prohibited since August 1, 2026. Operators must remove public kiosks and pay out customers by December 31, 2026. Background is in how do bitcoin ATMs work.

Other 2026 laws let state-chartered banks and credit unions offer crypto custody in a nonfiduciary capacity from August 1, 2026, after giving regulators 60 days' notice. Unclaimed property rules now include a presumption of abandonment for virtual currency, which must be liquidated within 30 days before it is reported. Other states are compared in do states tax crypto.

Rules differ by state and change often. Check the tax authority or a qualified professional for your own situation.