Unless a late fix will happen, employers in Minnesota that offer a tuition reimbursement plan (under 26 USC 127), adoption program (under 26 USC 137), and transit program (under 26 USC 132) may be suprised to learn that Minnesota does not provide the same exclusions of income as federal tax law.
More specifically, the federal rules were amended to extend these exclusions from income but MN law did not adopt similar amendments.
This means some employer benefits will need to be reported as taxable income under Minnesota tax law even if not for federal purposes.
The Minnesota Department of Revenue provides additional information on these topics at the following link:
Minnesota Department of Revenue
If you need help understanding these rules, or other taxability rules for health, welfare or fringe benefits, please contact Kinney & Larson.
NOTE: AS OF MARCH 2014, MN PASSED A BILL RETROACTIVE TO ALLOW CONFORMITY WITH FEDERAL LAW. THEREFORE NO TAXES MUST BE WITHHELD.