As we discussed in an earlier post, in March, Minnesota adopted most federal tax changes made for the 2010 tax year, including the exclusion from income of employer-provided health benefits to non-tax dependent adult children through age 26. Unfortunately, the legislation adopted that change for only the 2010 tax year and was silent as to future tax years.

However, on July 20, the Minnesota state legislature enacted new tax legislation that adopts most federal tax changes made through April 14, 2011 on a permanent basis. This means that for all plan years beginning on or after September 23, 2010, the value of employer-provided health benefits provided to any employee’s child under the age of 27 at the end of the taxable year (not just tax dependents) may be excluded from income for Minnesota state tax, as well as federal tax, purposes.