FRINGE
BENEFITS
Examples of Fringes
CASH
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AUTOMOBILES
AWARDS,PRIZES
CELLULAR PHONES
EDUCATIONAL
REIMUBURSEMENTS
• SAVINGS BONDS
• ALLOWANCES
• MEAL MONEY
(BASED ON HOURS
WORKED)
NON-CASH
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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 NONCASH, 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-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 RULE
• Must own or lease vehicle and provide vehicle to
one or more employees
• Auto must be provided for bona fide noncompensatory 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 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
REIMBURSEMENT
PLANS:
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
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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
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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:
• chris.k.casteel@irs.gov
• Address:
• 550 West Fort
• Boise, ID 83724
•.