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The
Minnesota Department of Revenue recently announced two new changes to employers'
obligations to withhold taxes from employee wages. To view the information
posted on the Minnesota Revenue website go to:
http://taxes.state.mn.us/taxes/withholding/other_supporting_content/whats_new_employers_10.shtml.
Employer
Provided Health Insurance and Adoption Benefits
The
Minnesota Department of Revenue has issued guidance regarding employer provided
health insurance and adoption benefits. As a result of the Patient Protection
and Affordable Care Act, the federal tax code exempts from income the value of
health insurance benefits provided to non-dependent children of employees under
age 27. It also increases the maximum allowable exemption from income for
employer provided adoption expenses to $13.170 per child.
However,
the Minnesota legislature did not enact legislation incorporating these changes
into the Minnesota tax code.
The
Minnesota Department of Revenue will not require companies to withhold taxes
from those federally exempt employer provided benefits, but employees will need
to include them as income on their 2010 Minnesota tax returns. Employers should
notify their affected employees of this so those employees can decide whether to
elect to have additional MN state tax withheld.
Minnesota
Released Guidance on Form W-4MN
The
Minnesota Department of Revenue has issued guidance on the new Form W-4MN.
Minnesota employees must fill this form out in addition to a federal Form W-4 in
special situations.
Effective
immediately, employers must have employees complete Form W-4MN in addition to
the federal Form W-4 if they:
- claim fewer Minnesota
allowances than federal allowances (Minnesota allowances cannot exceed the
number of federal allowances),
- claim more than 10
Minnesota withholding allowances,
- request additional
Minnesota withholding be deducted each pay period, or
- claim to be exempt
from Minnesota income tax withholding and you reasonably expect their wages to
exceed $200 per week.
For
more information and a FAQ on the new W-4MN, including when employers are
required to send a copy of this form to the Minnesota Department of Revenue,
see: http://taxes.state.mn.us/taxes/withholding/tax_information/frequently_asked_questions/withholding_faq_w-4mn.shtml#P69_3467.
The
new W-4MN form is located at: http://www.taxes.state.mn.us/taxes/individ/forms/w-4mn.pdf.
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