Adjusting Minnesota W-2s

Health coverage for adult nondependent children. Effective March 30, 2010, the health coverage provided for an employee’s adult nondependent children younger than age 27 is now generally tax-free to the employee for federal purposes. Employees with cafeteria plans are allowed to begin making pre-tax contributions to pay for this expanded benefit. This also applies to self-employed individuals who qualify for the self-employed health insurance deduction on their federal income tax return.

For Minnesota purposes beginning with tax year 2010, employees and self-employed individuals will need to include in Minnesota taxable income the fair market value of the policy providing health coverage for their adult nondependent children.

When entering the Minnesota Gross Income amount from the W-2, add the above fair market value.  If that amount is not shown on the w-2, it will have to be obtained directly from the employer