Agenda - Council - 03/11/2014 - Laserfiche WebLink

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QUICK REFERENCE GUIDE FOR PUBLIC EMPLOYERS If clothing provided does not qualify as a deductible expense (i.e. as a uniform), then the clothing, or reimbursement for the clothing, must be treated as a taxable fringe benefit and is subject to income, social security and Medicare taxes. Thus, a clothing allowance, such as for a police officer or firefighter uniform, qualifies for exclusion from income if it meets all the requirements of an accountable plan (qualified expense, substantiation, and return of excess). However, a detective's suit jacket and related clothing, since they are suitable for everyday wear, do not qualify as a uniform and are taxable to the employee. Group -Term Life Insurance An employer may exclude from income the cost of up to $50,000 of group -term life insurance from an employee's wages. If the employee receives more than $50,000 insurance, as determined by a table provided by IRS regulations, then the excess is includable as wages. The tables for determining the cost of the additional insurance to be used are included in Publication 15-B, Employer's Tax Guide to Fringe Benefits, and in Regulation 1.79-3(d)(2). If the employee makes any payment toward the cost of the insurance, then the amount of coverage attributable to that payment is not considered in determining the amount of insurance provided by the employer. Taxable employer -provided group -term life insurance is treated as wages, but is not subject to income tax withholding. It is subject to social security and Medicare tax withholding and must be included on Form W-2, in box 1, 3, 5 and 12 (code C). The taxable portion is included on Form 941, Employer's Quarterly Federal Tax Return, as part of wages, tips and other compensation, and on the lines for social security and Medicare wages. Meals Reimbursement for meal expenses may be excludable if they are qualifying travel expenses paid under an accountable plan, discussed earlier. You can exclude the value of meals you furnish to an employee from the employee's wages if they meet the following tests: • They are furnished on your business premises. • They are furnished for your convenience. This exclusion does not apply to additional compensation provided in lieu of meals, or to an allowance provided based on number of hours worked. In addition to any exclusion allowable under the provisions above, you can also exclude, as de minimis fringe benefits, infrequent meals provided to employees if they have so little value that accounting for them would be unreasonable or administratively impracticable. Occasional meal money to enable an employee to work overtime may also be excludable. For more information on de minimis benefits, see the FSLG Fringe Benefit Guide and Publication 15-B. Lodging 13