State Withholding on Cafeteria Plans

[Guest rwolffd12]

Does anyone have a current state by state listing of which states allow cafeteria plans on a pre-tax basis and which states do not. One of my clients will be hiring shortly throughout the United States and wanted to know which states recognize the tax preference for contributions and FSAs.

My fax number is 856-778-3376.

Thank you very much.

Bob

[Guest flexrh]

I believe all states recognize salary reductions for cafeteria plans for state withholding purposes with the exception of New Jersey (may not exempt state withholding for employee salary reductions) and Pennsylvania (may not exempt state withholding for dependent daycare benefits). The tricky part is state unemployment and worker's compensation. Usually, we refer clients to the state unemployment commission regarding SUTA and to their worker's compensation carrier regarding worker's compensation. The state taxing commission also should have this information. The client's payroll company (if any) also will have this information.

[GBurns]

Very good advice, but I must add the warning that not all payroll companies and WC insurers are knowledgeable. Make sure any opinion and advice given is supported by official documentation etc.