Download - FRINGE BENEFITS
FRINGEFRINGE BENEFITS BENEFITS
Examples of Fringes
CASH NON-CASH• AUTOMOBILES• AWARDS,PRIZES • CELLULAR PHONES• EDUCATIONAL
REIMUBURSEMENTS• SAVINGS BONDS• ALLOWANCES• MEAL MONEY
(BASED ON HOURS WORKED)
• GROUP TERM LIFE• MOVING EXPENSES• PARKING• ER PROVIDED
LIVING QUARTERS• CLOTHING OTHER
THAN CERTAIN UNIFORMS
• SPOUSAL TRAVEL• SEASON TICKETS
EXAMPLES OF EXCLUDED FRINGES
• Accident and health plans
• achievement awards
• athletic facilities• de minims fringes• dependent care
asst. programs• educational assist• employee discounts
• Group-term life• lodging on
employer’s premises• moving expenses
reimbursements• no-additional cost
services• tuition reduction• working condition
fringes
TAXATION OF BENEFITS• ALL REMUNERATION, CASH OR NON-
CASH, ARE CONSIDERED GROSS INCOME UNLESS SPECIFICALLY EXEMPT BY LAW. (IRC 61)
• BUSINESS PORTION MAY BE EXCLUDED AS A “WORKING CONDITION” FRINGE BENEFIT...(IRC 132)
• PROVIDED THE RECORDKEEPING REQUIREMENTS OF IRC 274 ARE MET.
Automobiles• PERSONAL USE CONSTITUTES
WAGES
• VALUATION METHODS: Cents per mile ($.565/Mile 2013) Commuter rule ($1.50 each way/day) Annual Lease Valuation
CENTS-PER-MILECENTS-PER-MILE
• FMV of auto must be less than $16,000 for automobile; $17,000 for truck - 2013
• At Least 50 Percent Of Annual Mileage Must Be For Business Use
• Must Be Actually Driven At Least 10,000 Miles Per Year (May Be All Personal Miles)
• Used During The Year Primarily By Employees.
COMMUTER RULECOMMUTER RULE• Must own or lease vehicle and provide
vehicle to one or more employees• Auto must be provided for bona fide non-
compensatory reasons – i.e., on-call • Must have written policy that prohibits
personal use other than commuting or de minims personal use.
• Cannot be used for Control employee • Government Control employee is any
elected official or employee whose salary exceeds $145,700 for 2011.
ANNUAL LEASE VALUATIONANNUAL LEASE VALUATION• Annual Lease Value Table provides annual
lease amount based on the fair market value of the automobile.
• Prorate annual lease amount based on percentage of personal use.
• Additional $.055 mile charged for each personal mile if employer provides fuel.
• Records must be maintained to show total miles and personal or business use.
• Employer may elect to tax 100% personal.
Exempt Vehicles• Clearly Marked Police
or Fire Vehicles• Unmarked Police Cars
*• Ambulances or
Hearses• Large Trucks• School Buses
EMPLOYEE EXPENSE
REIMBURSEMENTPLANS:
Must have an “Accountable
Plan”
MUST MEET ALL THREE RULES TO BE ACCOUNTABLE:
• Have a Business Connection• Be Substantiated by the
Employee• Return of Excess
Reimbursements
REIMBURSEMENTS THAT MAY BE WAGES:
• AUTOMOBILE EXPENSE REIMBURSEMENTS
• MEALS• LODGING• CLOTHING• MATERIALS AND TOOLS• MOVING EXPENSES
NON-ACCOUNTABLE PLANS
EXPENSES ARE NOT SUBSTANTIATED TO YOU WITH DOCUMENTS, SUCH AS RECEIPTS.
ADVANCES ARE NOT ACCOUNTED FOR AND/OR AMOUNTS IN EXCESS ARE NOT RETURNED TO YOU WITHIN A REASONABLE PERIOD OF TIME.
REASONABLE PERIOD OF TIME IS WITHIN 120 DAYS.
EMPLOYEE ALLOWANCES
Types of Allowances
• Car Allowance• Uniform Allowance• Moving Allowance• Travel Advance• Tool Allowance
Cell Phones and Computers• Computers are considered “listed
property”• Must account for personal use• Personal use taxable wages • Wages subject to all employment tax• NOTE: Cell phones are no longer
considered “listed property” – must be noncompensatory reasons
Supper Money• Must be paid to enable employee
to work overtime• Based on hours worked - Taxable
wages• Subject to all employment taxes
Longevity Pay• Report on Form W-2• Do NOT report on Form 1099-Misc• Subject to all employment taxes
Reimbursement Personal Expenses
• Payment for meals, not away overnight - Personal
• Uniforms must be qualified• Plain clothes detectives - reimbursed
for torn suit - Personal
Resources• Publications 15, 15A, 15B• IRC Section 3121• Payroll Management Guides• NC 218 Coordinator• Internal Revenue Service
Idaho FSLG Specialist• Chris Casteel
• Phone: 208-363-8818• Fax: 208-387-2849• E-mail:
•[email protected]• Address:
•550 West Fort •Boise, ID 83724
• .
