Fringe Benefits

Understand the tax treatment of fringe benefits provided to employees, including taxable, tax-deferred, and tax-excluded benefits. This guide covers common fringe benefits such as employer-provided vehicles, health insurance, and dependent care assistance. It also explains the nondiscrimination rules that ensure fair distribution of benefits among employees and the specific considerations for business owners.

Highlights:

• Taxable Fringe Benefits: Includes personal use of employer-provided vehicles.

• Tax-Deferred and Excluded Benefits: Covers employer contributions to retirement plans and health insurance.

• Nondiscrimination Rules: Ensures that fringe benefits are equitably distributed, avoiding preferential treatment for highly-compensated or key employees.

• Special Fringe Benefits: Details on low-value benefits, educational assistance, and group-term life insurance.