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HF4603

Internal Revenue Code conformed to the federal exclusion from gross income for employer student loan payments.
Legislative Session 94 (2025-2026)

AI Generated Summary

Purpose

  • The bill aims to conform Minnesota's individual income tax treatment to the federal exclusion from gross income for employer student loan payments. In other words, Minnesota would treat employer-provided student loan repayment benefits the same as the federal tax code does, excluding those payments from an employee’s Minnesota gross income.

Main Provisions

  • Amends Minnesota Statutes 2024 section 290.01 subdivision 31 to redefine Internal Revenue Code for state tax purposes.
  • The Internal Revenue Code, for this purpose, is the IRC as amended through May 1, 2023, and it specifically includes:
    • Section 70412 of Public Law 119-21, which provides the exclusion from gross income for employer student loan payments.
    • Any uncodified federal provisions related to provisions of the IRC that are incorporated into Minnesota law.

What the bill seeks to accomplish

  • Ensure Minnesota follows federal treatment by excluding employer student loan payments from Minnesota gross income, aligning state taxes with federal policy on this benefit.
  • Provide clarity that Minnesota’s tax conformity includes not only codified IRC provisions but also relevant uncodified federal provisions linked to the IRC.

Significant changes to existing law

  • Adds the explicit inclusion of the federal exclusion for employer student loan payments into the definition of the Internal Revenue Code used for Minnesota tax purposes.
  • Broadens the scope to cover uncodified federal provisions that relate to IRC provisions already incorporated in Minnesota law.
  • This effectively makes employer student loan repayment benefits tax-free at the Minnesota state level, consistent with federal treatment.

Terminology Inclusions (Key terms for clarity)

  • Internal Revenue Code (IRC)
  • Exclusion from gross income
  • Employer student loan payments / student loan repayment benefits
  • Minnesota Statutes 2024 section 290.01 subdivision 31
  • Section 70412
  • Public Law 119-21
  • Uncodified provision / uncodified federal law
  • Federal conformity / conforming to federal tax treatment

Potential implications

  • Employers offering student loan repayment benefits may see those benefits excluded from Minnesota gross income for employees, reducing state tax withholding for eligible workers.
  • Tax compliance for individuals may be simplified if Minnesota mirrors federal rules on these benefits.

Relevant Terms - Internal Revenue Code - Exclusion from gross income - employer student loan payments - Minnesota tax conformity - Public Law 119-21 - Section 70412 - uncodified provisions - Minnesota Statutes 290.01 - May 1, 2023 (IRC amendments date)

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
March 23, 2026HouseActionIntroduction and first reading, referred toTaxes

Citations

 
[
  {
    "analysis": {
      "added": [
        "Defines Internal Revenue Code as the Internal Revenue Code of 1986 as amended through May 1, 2023.",
        "Includes section 70412 of Public Law 119-21 as part of the Internal Revenue Code.",
        "Includes uncodified federal provisions related to the Internal Revenue Code that are incorporated into Minnesota law."
      ],
      "removed": [],
      "summary": "This bill amends Minnesota Statutes 2024 section 290.01 subdivision 31 to define the Internal Revenue Code for Minnesota tax purposes, conforming to the federal exclusion from gross income for employer student loan payments. The definition now includes amendments to the Internal Revenue Code through May 1, 2023 and the treatment of section 70412 of Public Law 119-21, as well as uncodified federal provisions incorporated into Minnesota law.",
      "modified": [
        "Amends Minnesota Statutes 2024 section 290.01 subdivision 31 to reflect the aforementioned definitional changes."
      ]
    },
    "citation": "290.01",
    "subdivision": "subd.31"
  },
  {
    "analysis": {
      "added": [
        "Incorporates section 70412 of Public Law 119-21 into the Internal Revenue Code definition for Minnesota law."
      ],
      "removed": [],
      "summary": "This bill references Public Law 119-21, specifically section 70412, to expand the definition of the Internal Revenue Code for Minnesota tax conformity purposes.",
      "modified": [
        "The Internal Revenue Code definition is expanded to include section 70412 of Public Law 119-21."
      ]
    },
    "citation": "Public Law 119-21",
    "subdivision": ""
  }
]

Progress through the legislative process

17%
In Committee

Sponsors

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