Last year as part of its health care reform bill, Congress mandated that group health plans and insurance issuers make coverage available to adult children until age 26. The Internal Revenue Code was amended at the same time to provide that there is no federal income tax due with regard to such coverage through December 31 of the year in which the child reaches age 26. However, many state tax codes did not provide the same tax exclusion for health benefit coverage for older children. While some states have since taken subsequent action to relieve the burden (and potential penalties on the employers and employees), at least for 2010, many others have yet to enact such exclusions.
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