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QUICK REFERENCE GUIDE FOR PUBLIC EMPLOYERS <br />Benefit or Program <br />IR Code <br />Section <br />Income Tax <br />Withholding <br />Social Security <br />and Medicare <br />Moving Expenses <br />217 <br />Exempt (up to limits) if expenses would be <br />deductible if the employee had paid them <br />No -additional -cost <br />services <br />132(b) <br />Exempt for employees receiving benefits of <br />goods and services in line of business (see Pub. <br />15-B) <br />Sick Pay <br />3121(a)(15); <br />6051(f) <br />Taxable to extent coverage paid by employer <br />(see Pub. 15-A) <br />Tuition Reduction <br />(educational <br />institution) <br />117 <br />Exempt if for undergraduate education (or <br />graduate education if the employee performs <br />teaching or research activities). <br />Travel Expenses <br />162 <br />Exempt if paid under an accountable plan for <br />necessary expenses. (see Pub. 15-A) <br />Vehicle Provided by <br />Employer <br />280F <br />Exempt to the extent of business use; generally, <br />commuting use taxable (see Pub. 15-B) <br />Working Condition <br />Fringe Benefit <br />132(d) <br />Exempt if cost would be deductible to employee <br />if paid by employee (see Pub. 15-B) <br />8. INFORMATION REPORTING <br />Employers report compensation and withholding for employees on Form W-2, and file <br />Form 941 quarterly to report aggregate wage and withholding amounts. The <br />requirements and procedures for employee reporting are discussed in detail in <br />Publication 15, Employer's Tax Guide. Other information return reporting requirements <br />are discussed in the General Instructions for Certain Information Returns. <br />Any entity, including a governmental organization, conducting a trade or business is <br />required to file information returns for certain types of payments. In most cases, these <br />payments are reported on Form 1099-MISC, Miscellaneous Income. IRC 6041(a) <br />states that all persons engaged in a trade or business and making payment in the <br />course of the trade or business to another person of rent, of $600 or more in any year <br />must issue an information return indicating the amount of such income and the name <br />and address of the recipient of the payment. Governmental entities are "persons" for <br />this purpose. <br />All payments of compensation to an employee should be reported on Forms W-2 and W-3; <br />never use Form 1099-MISC to report payments for services by an employee. <br />The recipient of the payment is required to furnish the entity's name, address and identification <br />number. You should obtain this information before payments are made. This identification <br />number must be included on the information return. <br />16 <br />