The Catholic University of America

Summary of Federal Laws

Tax

Tax Issues Related to Employment

Fringe Benefits

26 U.S.C. 132; 26 USC 280F; 26 CFR 1.274-5T; 26 CFR 1.132

Any property or service (or cash under certain circumstances) provided to an employee in addition to or in lieu of regular wages will be a taxable fringe benefit to the employee, unless specifically excluded by statute. Employers must report taxable fringe benefits to employees on Form W-2, and taxable fringe benefits to independent contractors on Form 1099-MISC. Fringe benefits include accident and health benefits; achievement awards; adoption assistance; athletic facilities; de minimis benefits; dependent care assistance; educational assistance; employee discounts; employee stock options; group-term life insurance coverage; lodging on your business premises; meals; moving expense reimbursements; no-additional -cost services; transportation (commuting) benefits; employer provided cell phones, tuition reduction and working condition benefits.

For a summary of rules that apply to each of the different categories, and a chart containing on overview of tax treatment of these benefits, see IRS Publication 15-B Employer's Tax Guide to Fringe Benefits. 

Qualified Transportation fringe benefits do not require a written plan document. See 26 CFR 1.132.9 at Q&A 6

 Interim Guidance by the IRS Regarding Treatment of Qualified Transportation Fringe Benefits and Providing Penalty Relief to Tax Exempt Organizations Dec. 10, 2018. 

Addresses determining nondeductible amount of parking fringe expenses and unrelated business taxable income and providing an estimated tax penalty relief to tax-exempt organizations. The guidance is provided in Notices 2018-99 and 2018-100.

The Tax Cuts and Jobs Act changes effective tax year 2018

Under HR 1 (Public Law 115-970 The Tax Cuts and Jobs Act, signed into law on Dec. 22, 2017, qualified moving expenses may be excluded from employee's income through 2017, but this fringe benefit will be suspended, except for military moving expenses, for tax years 2018-2025. 

(note: IRS confirmed 2018 reimbursements for 2017 moving expense can be tax free)

Qualifed bicyle commuting costs as a qualified transportation fringe benefit will aslo be suspended for tax years 2018 through 2025.

See the IRS Tax Cut and Jobs Act Resources and also SHRM summary entitled President Signs Tax Bill Altering Employee Benefits. (1-5-18)

 


Related Code Provisions

26 USC § 162 is the provision of the U.S. Code that allows for the deduction of trade or business expenses. 26 USC § 117 deals with exclusion from income of scholarships and fellowships, and 26 USC § 127 deals with educational assistance programs and their taxability.

 

IRS Publication 15-B Employer's Tax Guide to Fringe Benefits 

 

 

 

 

updated 1-24-19 mlo