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employee has to be absent from work. Such payments are promptly
discontinued if and when an employee becomes able to work again.
The disability payments from the Minnesota State Retirement
System are computed with regard to the period the employee was
absent from work. The critical requirement for exclusion under
section 105(c) that the payments must be “computed * * * without
regard to the period the employee is absent from work” is not
satisfied. Armstrong v. Commissioner, supra.
Section 105(c) does not apply in this case. The payments
from the Minnesota State Retirement System are taxable under
section 61(a)(11). The payments from the Social Security
Administration are taxable under section 86. We sustain
respondent’s determination.
Reviewed and adopted as the report of the Small Tax Case
Division.
Decision will be entered
for respondent.
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Last modified: May 25, 2011