Turn Your Minnesota Tax Liability into Local Impact: The 2026 State Housing Tax Credit
In the world of financial planning, tax credits can often reduce your tax liability. You’ve likely seen them before and perhaps you’ve utilized energy credits for installing solar panels or EV credits for purchasing an electric vehicle. Usually, these credits are approximately 25% to 30% of your costs.
However, a rare and powerful opportunity currently exists for Minnesota residents. The Minnesota State Housing Tax Credit (SHTC) Program offers 85% state income tax credit. It is rare to find a credit like this in the tax code, and because the program is set to wind down in 2028, the window to act is closing.
Credit vs. Deduction: Understanding the Math
It is important to distinguish between a tax deduction and a tax credit.
- A Tax Deduction helps lower your taxable income. If you are in a 30% tax bracket, a $1,000 deduction saves you $300.
- A Tax Credit is a dollar-for-dollar reduction of your actual tax bill.
With the SHTC, if you contribute to the fund, the state gives you 85% of that money back as a direct credit against your Minnesota taxes. * There may be an opportunity to deduct the 15% not covered by the credit against your federal income taxes. Be sure to check with your tax advisor.
Control Your Tax Dollars
This program helps you to exert control over where your tax dollars go. Rather than sending your full tax payment to the general state coffer, you can direct it toward increasing affordable housing right here in Minnesota.
You even have the power to select specific projects in your area. For example, Habitat for Humanity has multiple qualifying projects across the state. By designating your contribution to a local Habitat build, you are helping to ensure your money stays in your community to support a family with homeownership.
Consider the math of a $7,000 gift to a local Habitat for Humanity project. With the 85% state credit, you receive $5,950 back. When you factor in the potential federal deduction for the remaining balance, the net cost to you is only $1,000 to make a $7,000 impact.
The 2026 Timetable
Competition for this tax program is considerable.
- Available Funds: $9.9 million for 2026.
- Launch Date: The application portal opens February 17, 2026, at 8:00 AM.
- The Trend: Last year, these funds were fully claimed by March.
- Minimum Contribution: $1,000.
How to Participate
To secure your credits, you must apply through the Minnesota Housing website. You can choose to contribute to the “General Contribution Pool” or a “Specific Qualified Project” (like a local Habitat for Humanity build).
Visit the portal here: Minnesota Housing SHTC Contribution Fund
This is intended for informational purposes only. You should not assume that any discussion or information contained in this document serves as the receipt of, or as a substitute for, personalized investment advice from Savant. Please consult your investment professional regarding your unique situation.