Gross Income - Section - Nontaxable Fringe Benefits

12 important questions on Gross Income - Section - Nontaxable Fringe Benefits

Under what conditions are health insurance premium payments excludable from an employee's income?

  • When the employer paid the premiums.
  • Payment to the employee as reimbursement for medical expenses actually incurred
  • Payment to the employee as compensation for permanent medical loss

When can the value of lodging furnished by an employer be excluded from an employee's gross income?

When it is required as a condition of employment.

What is the maximum amount of educational expenses that can be excluded from gross income when paid by an employer?

Up to $5,250
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How much can a taxpayer exclude from taxable income for qualified adoption expenses paid by an employer?

Up to $17,670. The exclusion is phased out for taxpayers with modified adjusted gross income of $265,080–$305,080.

Who can exclude tuition reductions from income at the undergraduate level?

Employees of educational institutions

Under what conditions can graduate students exclude tuition reductions from income?

Only if they are engaged in teaching or research activities and only if the tuition reduction is in addition to the pay for the teaching or research.

What is the limit for excludable merchandise discounts provided by employers?

The excludable discount is limited to the employer's gross profit percentage. Any excess must be reported as income.

What is the limit for excludable service discounts provided by employers?

The excludable discount on services is limited to 20 percent of the fair market value of the services. Any excess discount must be reported as income.

Are contributions made by an employer to a qualified non-Roth retirement plan taxable?

Generally, payments made by an employer to a qualified non-Roth retirement plan isn't taxable income to the employee at the time of contribution

What is a flexible spending arrangement (FSA)?

They allow employees to redirect part of their salary into an account before tax and then receive a tax-free reimbursement of certain incurred expenses. An employee generally must use the money in an FSA within the plan year.

Are employee contributions to qualified non-Roth retirement plans taxable?

Employees can elect to contribute part of their salary into certain qualified non-Roth retirement plans pretax, so the employee is not taxed on that income.

When are benefits received from qualified non-Roth retirement plans taxable?

In the year in which the amount is distributed or made available to the employee.

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