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HF 4603

Internal Revenue Code conformed to the federal exclusion from gross income for employer student loan payments.

2025-2026 Regular Session Introduced by Greg Davids and 1 co-sponsor

Minnesota would exclude employer student loan repayment benefits from state taxable income, aligning with federal rules and boosting take-home pay for recipients.

Introduction and first reading, referred to Taxes
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WeVote Research Nonpartisan
Bill Summary · HF 4603

Summary of HF 4603 (2025-2026) – Minnesota

Title

Internal Revenue Code conformed to the federal exclusion from gross income for employer student loan payments.

Purpose and intent

HF 4603 seeks to align Minnesota tax law with federal treatment of employer-driven student loan repayment benefits. Specifically, it adds a conformity to the federal exclusion from gross income for employer student loan repayment assistance, meaning employer contributions toward employee student loan payments would be excluded from an employee’s taxable income for Minnesota individual income tax purposes, mirroring federal rules.

Key provisions and changes

  • Conformity to federal rule: The bill adopts the federal exclusion for employer-paid or employer-reimbursed student loan repayment benefits from gross income for Minnesota personal income tax purposes.
  • Taxable income impact: Under the bill, employee benefits received as employer student loan repayment assistance would not be included in Minnesota adjusted gross income (AGI) as taxable wages or compensation, subject to any Minnesota-specific compliance details.
  • Scope of benefit: Applies to benefits paid or reimbursed by an employer toward an employee’s student loan debt, consistent with the federal program (often referred to as a qualified student loan repayment benefit).
  • Coordination with existing law: The conformity is designed to align Minnesota’s Internal Revenue Code (or state tax treatment) with the federal exclusion, reducing the tax burden on employees receiving this employer benefit and avoiding double taxation at the state level.

Who is affected

  • Employees receiving employer student loan repayment benefits: These individuals would see the employer-provided contributions excluded from Minnesota taxable income, aligning with the federal exclusion.
  • Employers offering student loan assistance: Employers providing such benefits may experience more favorable tax treatment of those benefits for Minnesota employees, aligning with federal tax treatment.
  • Minnesota personal income taxpayers: Overall state tax receipts and taxable income calculations may be adjusted for those utilizing employer student loan repayment benefits.

Procedural and timeline aspects

  • Introduced and referred: The bill was introduced and given its first reading on March 23, 2026, and referred to the Taxes committee.
  • Sponsors: Primary and co-sponsors include Greg Davids and Erica Schwartz.
  • Next steps (typical): If advanced, the bill would proceed through committee discussions, potential amendments, floor votes in the House, and, if passed, move to the Senate for consideration. Final enactment would require the governor’s signature.

Practical implications

  • Tax planning: Minnesota taxpayers who receive employer student loan repayment benefits could plan for a higher take-home pay due to the exclusion from Minnesota taxable income.
  • Employer considerations: Employers may gain clarity on the treatment of these benefits for Minnesota employees, potentially influencing the design and communication of compensation packages.

If you’d like, I can add a comparison to current Minnesota law showing the exact differences in taxable income treatment or provide a brief fiscal note once the bill’s fiscal impact is available.

Compiled from official sources — confirm details with the bill’s official record.

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