I heard some Fringe Benefits are not taxed to the employee. Can you provide me with some of the Non-Taxable Fringe Benefit Plans that are permitable by the IRS?
I am trying to understand this concept and see what works for my C-Corporation. Any assistance on this subject matter would be most appreciated!
What are Fringe Benefits?
Fringe Benefits are plans that are offered by employers or corporations that provide for a tax deduction for an employer and tax-free benefits to it employees. Thus, these plans when structured properly will provide an attractive way to provide tax-free benefits to its employees whilst at the same time provide a tax deduction to the corporations.
There are a lot of special rules that the IRS has established that apply to highly compensated employers, key employees and owner-employees. Clearly, these rules are an attempt to prevent potential abuse of Fringe benefits plans by corporations.
The general rule regarding Fringe Benefits are that they are all taxable to the employees unless specially excluded by the IRS code section. Currently, the IRS code has specially excluded some Fringe Benefits from being taxable to employees and these are as follows;
1. Group Term Life Insurance.
This has been explained in detail under Code Section 79.
2. Medical Insurance Plans.
This has been explained in detail under Code Section 106.
3. Cafeteria Plans.
This has been explained in detail under Code Section 125
. 4. Adoption Benefits.
This has been explained in detail under Code Section 137
5. Dependent Care Assistance.
This has been explained in detail under Code Section 129.
6. Educational Assistance Programs.
This has been explained in detail under Code Section 127.
7. Meals and Lodging Benefits.
This has been explained in detail under Code Section 119.
Linear Mode
