MN SF1258

Prohibits employers from paying sexual harassment or abuse settlement funds as wages or severance pay, regardless of whether the settlement includes a nondisclosure agreement, effective the day after enactment for settlements entered on or after that date.

Allows Minnesota state income tax subtraction for "qualifying damages" received under sexual harassment or abuse claims that are not excluded from federal gross income under Internal Revenue Code section 104(a)(2) because the injury or sickness is not physical.

Allows Minnesota state income tax subtraction for severance pay received under a sexual harassment or abuse settlement that does not include a nondisclosure agreement.

Tax subtraction provision is effective for taxable years beginning after December 31, 2022.