Publication 15 B - Employer'S Tax Guide To Fringe Benefits - 2002 Page 4
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24Table 2–1. Special Rules for Various Types of Fringe Benefits
(For more information, see the full discussions in this section.)
Treatment Under Employment Taxes
Social Security and
Type of Fringe Benefit
Income Tax Withholding
Medicare
Federal Unemployment
1,2
Accident and health benefits
Exempt
, except for
Exempt, except for
Exempt
certain long-term care
certain payments to S
benefits.
corporation employees
who are 2%
shareholders.
1
Achievement awards
Exempt
up to $1,600 ($400 for nonqualified awards).
1
Adoption assistance
Exempt
Taxable
Taxable
Athletic facilities
Exempt if substantially all use during the calendar year is by employees,
their spouses, and their dependent children.
De minimis (minimal) benefits
Exempt
Exempt
Exempt
3
Dependent care assistance
Exempt
up to certain limits, $5,000 ($2,500 for married employees filing
separate return).
Educational assistance
Exempt up to $5,250 of benefits each year. See page 7.
4
Employee discounts
Exempt
up to certain limits. See page 8.
Employee stock options
See Employee Stock Options on page 9.
1,5
Group-term life insurance
Exempt
Exempt
up to cost of
Exempt
coverage
$50,000 of coverage.
(Special rules apply to
former employees.)
1
Lodging on your business
Exempt
if furnished for your convenience as a condition of employment.
premises
1
Meals
Exempt
if furnished on your business premises for your convenience.
Exempt if de minimis.
1
Moving expense
Exempt
if expenses would be deductible if the employee had paid them.
reimbursements
4
4
4
No-additional cost services
Exempt
Exempt
Exempt
1
Transportation (commuting)
Exempt
up to certain limits if for rides in a commuter highway vehicle
benefits
($100), transit passes, ($100) or qualified parking ($185). See page 14.
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.
Page 4
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