HF4027 Summary

• Authorizes employers to offer optional family and medical leave savings accounts, with contributions up to $6,750 annually exempt from state withholding taxes and allowed as a tax subtraction.

• Allows employees to withdraw account funds to offset wages lost due to family or medical leave under the federal Family and Medical Leave Act or Minnesota Statute section 181.941, with unused funds withdrawable without penalty at retirement or separation.

• Establishes a state income tax credit equal to the difference in federal tax liability based on whether family and medical leave savings account contributions are included in gross income.

• Imposes a 20 percent penalty tax on unauthorized account withdrawals and protects account assets from legal process except for certain family law proceedings.

• Appropriates unspecified funding in fiscal year 2017 to small business development centers to provide information and technical assistance to Minnesota businesses implementing paid family, medical, pregnancy, or bonding leave programs.