Does state tax treatment of cafeteria plan benefits match IRS rules?

Author: Ryan F. Donovan

State tax treatment of cafeteria plan benefits usually mirrors the federal guidelines at least to some degree, but this is not always the case. Many states either have agreed to abide by the Internal Revenue Code (IRC) guidelines in place at a certain point in history or have agreed to mirror any adjustments made as time goes on. Some states do not follow IRC guidelines for some or all typical cafeteria plan benefits and may in fact tax something that is exempted in most jurisdictions.