Publication 15-B Employer'S Tax Guide To Fringe Benefits - 2003 Page 4
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Transportation (commuting) benefits.
See Table 2 –1 below for an overview of the employ-
ment tax treatment of these benefits.
•
Tuition reduction.
•
Working condition benefits.
Table 2–1. Special Rules for Various Types of Fringe Benefits
(For more information, see the full discussion in this section.)
Treatment Under Employment Taxes
Type of Fringe Benefit
Income Tax Withholding
Social Security and Medicare
Federal Unemployment (FUTA)
1,2
Exempt
, except for certain
Exempt, except for certain
Exempt
long-term care benefits
payments to S corporation
Accident and health benefits
employees who are 2%
shareholders.
Achievement awards
Exempt
1
up to $1,600 ($400 for nonqualified awards).
1
Adoption assistance
Exempt
Taxable
Taxable
Exempt if substantially all use during the calendar year is by employees, their spouses, and their
Athletic facilities
dependent children.
De minimis (minimal) benefits
Exempt
Exempt
Exempt
3
Dependent care assistance
Exempt
up to certain limits, $5,000 ($2,500 for married employee filing separate return).
Educational assistance
Exempt up to $5,250 of benefits each year. (See Educational Assistance on page 7.)
Employee discounts
Exempt
4
up to certain limits. (See Employee Discounts on page 8.)
Employee stock options
See Employee Stock Options on page 8.
Exempt
Exempt
1,5
up to cost of $50,000
Exempt
Group-term life insurance
of coverage. (Special rules apply
coverage
to former employees.)
1
Lodging on your business
Exempt
if furnished for your convenience as a condition of employment.
premises
Exempt if furnished on your business premises for your convenience.
Meals
Exempt if de minimis.
1
Moving expense reimbursements Exempt
if expenses would be deductible if the employee had paid them.
4
4
4
No-additional cost services
Exempt
Exempt
Exempt
Exempt
1
up to certain limits if for rides in a commuter highway vehicle ($100), transit passes ($100), or
Transportation (commuting)
qualified parking ($190). (See Transportation (Commuting Benefits) on page 14.)
benefits
Exempt if de minimis.
4
Tuition reduction
Exempt
if for undergraduate education (or graduate education if the employee performs teaching or
research activities).
Working condition benefits
Exempt
Exempt
Exempt
1
Exemption does not apply to S corporation employees who are 2% shareholders. See page 3.
2
Exemption does not apply to certain highly compensated employees under a self-insured plan that favors those employees.
3
Exemption does not apply to certain highly compensated employees under a program that favors those employees.
4
Exemption does not apply to certain highly compensated employees.
5
Exemption does not apply to certain key employees under a plan that favors those employees.
•
Accident and Health Benefits
Contributions to the cost of accident or health insur-
ance.
This exclusion applies to contributions you make to an
•
Contributions to a separate trust or fund that pro-
accident or health plan for an employee, including the
vides accident or health benefits directly or through
following:
insurance.
Page 4
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