35 Miss. Admin. Code Pt. III, Subpt. 3, Ch. 03 — Employee Benefits

100 A taxpayer may exclude from gross income compensation which is received under a
worker's compensation act, for personal injuries or sickness incurred in the course of
employment. The exclusion also applies to compensation which is paid under a worker's
compensation act to the survivor or survivors of a deceased employee. The exclusion does
not apply to a retirement pension or annuity to the extent that it is determined by reference
to the employee's age or length of service, or the employee's prior contributions, even
though the employee's retirement occurs from an occupational injury or sickness. Amounts
received as compensation for a non-occupational injury or sickness, and amounts received
as compensation for an occupational injury or sickness in excess of the amount provided in
the applicable worker's compensation act are also not subject to the exclusion.
101 A taxpayer may exclude from gross income the amount of any damages received under a
suit or settlement of a claim on account of personal injuries or sickness. Damages in cases
of nonphysical injury equal to the amount of medical expenses for treatment of emotional
distress may be excluded from gross income.
102 A taxpayer may exclude from gross income the amounts received through accident or
health insurance for personal injuries or sickness to the extent that such amounts are not
attributable to contributions of the employer which are not includible in the gross income of
the employee or are not paid by the employer. Therefore, if an employee received
compensation for personal injuries or sickness from an accident or health insurance policy
which the worker purchased or from a fund maintained exclusively by employee
contributions, the amounts received are excluded from gross income.
103 Amounts received by employees under employer financed accident and health plans may
be excluded from gross income if such amounts are paid to reimburse the taxpayer for
expenses incurred for medical care of the taxpayer, spouse or dependents or to reimburse
the employee for medical care and payments for permanent injury or loss of bodily
function.
104 The gross income of an employee does not include contributions which his employer
makes to an accident or health plan for compensation (through insurance or otherwise) to
the employee for personal injuries or sickness incurred by him, his spouse or his
dependents.
105 Nontaxable benefits under Section 125 of the Internal Revenue Code referred to as
"cafeteria plans" are also excludable for Mississippi Income Tax purposes to the extent
allowed by the IRC. Mississippi also recognizes Section 129 of the Internal Revenue Code
pertaining to dependent care assistance programs and Section 127 of the Internal Revenue
Code pertaining to employer provided educational assistance plans. The benefits mentioned
above under IRC Sections 125, 127 and 129 are not subject to Mississippi withholding.
106 The value of any meals or lodging furnished to an employee, his spouse or any of his
dependents by or on behalf of his employer for the convenience of the employer may be
excluded from gross income of an employee but only if in the case of meals, the meals are
furnished on the business premises of the employer, or in the case of lodging, the employee
is required to accept such lodging on the business premises of his employer as a condition
of his employment.
107 The rental value of a dwelling furnished to a minister of the gospel is exempt from tax as is
a rental allowance to the extent that the allowance is used to rent or provide a home. This
includes the portion of a retired minister's pension designated as a rental allowance by the
national governing body of a religious denomination having complete control over the
retirement fund. The exemption also applies to the rental value of a residence furnished to a
retired minister (but not the minister's spouse).
108 (Reserved)
35.III.3.03 revised effective January 1, 2022
109 (Reserved)
110 (Reserved)
Chapter 04 (Reserved)