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Individual income tax brackets adjusted

The Minnesota Department of Revenue announced this week that the state's individual income tax brackets for tax year 2011 will expand by 1.5 percent. State law requires the department to adjust the brackets to compensate for increases in inflation.

The Minnesota Department of Revenue announced this week that the state's individual income tax brackets for tax year 2011 will expand by 1.5 percent. State law requires the department to adjust the brackets to compensate for increases in inflation.

Expanding the brackets prevents taxpayers from being pushed into higher income tax brackets solely because of inflationary increases in their income. Since tax year 2000, Minnesota's income tax brackets have expanded by more than 30 percent as a result of inflation.

The bracket adjustments are based on the change in the U.S. Consumer Price Index for all urban consumers for the average of the 12 months ending August 2010. The index measures annual inflationary changes in the cost of basic goods and services. The department adjusts the brackets each year by the inflation factor and rounds the result to the nearest $10.

The brackets apply to tax year 2011. Taxpayers who make quarterly payments of estimated tax should use the following rate schedule to determine their payments, which are due starting in April 2011. Minnesota's tax rates remain the same.

2011 Minnesota income brackets and rates for taxable income:

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5.35 percent - married filing jointly income from $0 to $33,770; married filing separately income from $0 to $16,890; head of household income $0 to $28,440; single income from $0 to $23,100.

7.05 percent - married filing jointly income from $33,771 to $134,170; married filing separately income from $16,891 to $67,090; head of household income from $28,441 to $114,290; single income from $23,101 to $75,890.

7.85 percent - married filing jointly income $134,171 and over; married filing separately income $67,091 and over; head of household income $114,291 and over; single income $75,891 and over.

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