2026 tax year · Minnesota
Services and task work taxes in Minnesota
TaskRabbit, Rover, Upwork and the rest report your gross and withhold nothing. The gap between that and what you are taxed on is mileage, in Minnesota that gap is worth $2,396 in tax.
Take a driver who grossed $34,000 over 18,000 business miles. After mileage at 74.3 cents and the rest of the stack, worked through on the services and task work page $9,030 comes off and $24,970 is left as taxable profit. That profit is what Minnesota and the IRS charge against.
What that leaves you owing in Minnesota
Minnesota uses graduated 2026 income tax brackets topping out at 9.85%, across 4 brackets, on top of federal income tax and self-employment tax.
| Self-employment tax | $3,528 |
| Federal income tax | $568 |
| Minnesota income tax | $1,242 |
| Total tax | $5,338 |
| Effective rate on gross | 15.7% |
Earning more in Minnesota
A single filer taking the standard deduction, standard mileage method, this work as the only income, the calculator above handles the other filing statuses. Miles rise with earnings, so the deduction rises too, and the effective rate on gross climbs more slowly than it would for someone whose income grew without expenses attached:
| Volume | Gross | Mileage off | Taxable profit | Minnesota tax | Total tax | Rate on gross |
|---|---|---|---|---|---|---|
| Part-time | $11,000 | $1,485 | $9,515 | $473 | $1,818 | 16.5% |
| Steady side income | $34,000 | $4,455 | $29,545 | $1,469 | $6,552 | 19.3% |
| Full-time | $55,000 | $7,425 | $47,575 | $2,539 | $11,712 | 21.3% |
Minnesota specifics that change the number
Minnesota is one of the twelve states that still taxes Social Security benefits, which matters if you are drawing benefits alongside self-employment income.
Working across a Minnesota line
Services income is sourced to where the work was physically done. A job over the line can create a filing obligation in that state even for a single afternoon, and reciprocity agreements do not help, they cover wages paid by an employer, not self-employment income.
On $24,970 of profit, what the states around Minnesota would charge:
| State | Its tax | vs Minnesota |
|---|---|---|
| North Dakota | $0 | −$1,336 |
| South Dakota | No income tax | −$1,336 |
| Iowa | $949 | −$387 |
| Wisconsin | $970 | −$366 |
- North Dakota would take $1,336 less, $0 against Minnesota's $1,336.
- South Dakota has no income tax at all, so the same work done there costs $1,336 less in state tax than it does in Minnesota.
- Iowa would take $387 less, $949 against Minnesota's $1,336.
- Wisconsin would take $366 less, $970 against Minnesota's $1,336.
Services and task work tax questions in Minnesota
How much should a Minnesota contractor set aside?
About 15.7% of gross on the $34,000 example, $5,338 across self-employment tax, federal income tax and $1,242 to Minnesota. In practice that means moving about $157 of every $1,000 payout into a separate account the day it lands, and sending roughly $1,335 to the IRS each quarter, no platform withholds any of this for you. Set aside from each payout rather than finding it in April.
Does the $34,000 on my 1099-NEC match what Minnesota taxes?
No. Minnesota taxes profit, not gross. After $9,030 of deductions the taxable figure is $24,970, so the Minnesota bill is $1,242 rather than what gross alone would suggest. The form reports what the platform paid out, it knows nothing about your costs, and no one subtracts them for you. On this example 27% of the gross never becomes taxable income, but only for the contractor who kept the records to prove it.