Minnesota expects to pay the Internal Revenue Service about $6.8 million — with the final total still subject to IRS calculation — after discovering it mishandled tax rules for health and dental benefits for former spouses of state employees.

Minnesota Management and Budget sent a letter to lawmakers on June 18 requesting the approval of an initial $2.47 million of an estimated $6.8 million in total owed to the IRS. In that letter, MMB said it found an error in February of 2025 with how the state provided insurance coverage for ex-spouses of state employees under the State Employee Group Insurance Program medical and dental insurance plans.

“The total amount due to the IRS will be approximately $6.8 million, subject to final calculation by the IRS,” the letter reads. “MMB intends to draw

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