Fringe Benefits Blitz for 2023: Taxing and Reporting Fringe Benefits

On Demand Webinar

Webinar Details $219

  • Rated:
  • Webinar Length: 100 Minutes
  • Guest Speaker:   Vicki Lambert
  • Topic:   Taxation and Accounting, Human Resources, Compensation and Benefits, Payroll
  • Credit:   CPE 2.0, HRCI 1.5, SHRM 1.5, ATAHR 1.5, ATAPR 1.5
All Access Membership

Overview:
Fringe Benefits are an important component for recruiting and keeping high quality employees in today’s business world.  But the diversity of available fringe benefits can make the area of payroll compliance positively overwhelming!

Background:
Let’s face it… complying with the Internal Revenue Tax Code requirements and federal regulations for fringe benefits such as relocation, meals, lodging, educational assistance, health insurance, transportation and third-party sick pay can be complicated.  The taxation and reporting for these fringe benefits offered by many companies today are major components of a payroll department’s responsibilities. And with the IRS looking for consistency of treatment—you can’t afford to make a mistake.
As a payroll professional you must know cold—no guessing—when a fringe benefit is taxable and when it is not, when it is reportable and when it is not. Payroll must know when providing a fringe benefit must be considered wages or if it is “tax free”.  What if the employee pays some of the cost of a fringe benefit? How does that affect taxing and reporting? Are there dollar limits? Does it become taxable after a certain amount? And after you have mastered all the facts along comes a new tax bill by Congress that can change everything you just learned when it comes to taxing fringe benefits.
All fringe benefits must be handled correctly, under the latest rules, to minimize the chance for penalties and interest to be levied against your company or for triggering larger and more intrusive governmental audits

Fringe Benefits covered in this event:

Transportation Fringe Benefits

  • What are the four allowable methods to calculate the personal use of a company car
  • How to calculate the taxable wages for the personal use of a company vehicle using one of the four accepted IRS methods
  • When an auto allowance is considered taxable wages and when it is not
  • IRS 132 transportation fringe benefits including parking, bus passes and tokens and bicycles—when to tax and when not too 
  • Calculating the personal use of a company aircraft even if there is a business trip involved somewhere   

Section 132 Fringe Benefits

  • Working Condition Fringe Benefits
  • De Minimis Fringe Benefits
  • Employee Discounts
  • No additional cost services
  • Employee Achievement Awards for Length of Service and Safety-the changes under the new tax bill
  • Prizes and Awards—Cash and Noncash
  • Cell phones
  • Gift certificates and gift cards
  • Holiday gifts

Meals, Clothing, Housing and Education Fringe Benefits

  • The changes to employer provided relocation under the Tax Cuts and Jobs Act of 2017
  • On-site lodging taxation and reporting
  • Taxing lodging for executives such as vacation condos
  • Providing meals for employees—is it taxable or not?
  • Are the rules different for on-site cafeterias
  • What if the employee pays for the meal—does that affect taxation
  • What to do with occasional meals
  • Educational assistance programs and taxation

Who can Benefit: 

  • Payroll Executives/ Managers/ Administrators/ Professionals/ Practitioners/ Entry Level Personnel
  • Human Resources Executives/ Managers/ Administrators
  • Accounting Personnel
  • Business Owners/ Executive Officers/ Operations and Departmental Managers
  • Lawmakers
  • Attorneys/ Legal Professionals
  • Any individual or entity that must deal with the complexities and requirements of Payroll compliance issues
  1. Introduction
  2. Our Focus For Today 00:01:25
  3. Section 132 - Employee Benefits 00:03:53
  4. De Minimis 00:03:58
  5. De Minimis Examples 00:05:52
  6. De Minimis Examples Cont’d 00:07:03
  7. Never De Minimis 00:11:30
  8. Occasional Meal Reimbursements 00:14:09
  9. Transportation Fringe Benefits 00:15:32
  10. Unusual Circumstances and Unsafe Conditions 00:15:47
  11. Unusual Circumstances and Unsafe Conditions Cont’d 00:16:42
  12. Qualified Transportation Fringe Benefit 00:18:47
  13. Providing Benefits 00:19:22
  14. Transit Passes 00:20:25
  15. Transit Passes Cont’d 00:20:56
  16. Transit Passes Cont’d 00:22:05
  17. Transit Passes - Example 2 00:22:37
  18. Qualified Parking 00:23:14
  19. Commuter Highway Vehicle 00:24:19
  20.  Bicycle Commuting 00:25:15
  21. No Additional Cost Services 00:25:29
  22. No Additional Cost Services - Reciprocal Agreements 00:26:55
  23. Working Condition Fringe Benefit 0027:25:
  24. Employee Discounts - Section 132 00:28:04
  25. Employee Achievement Awards 00:29:35
  26. Length of Service Award 00:30:23
  27. Safety Awards 00:31:03
  28. Meals on Premises 00:31:47
  29. Food Service Workers 00:33:52
  30. Emergency Workers 00:34:36
  31. Emergency Workers - Example 00:34:47
  32. Short Meal Periods - Nontaxable 00:35:15
  33. Proper Meals Not Available - Nontaxable 00:36:02
  34. Meals After Work Hours - Nontaxable 00:36:29
  35. Good Will Meals 00:36:51
  36. Meals On Non-workdays Or With Lodging 00:37:14
  37. Employer Operated Eating Facilities 00:37:41
  38. Meals and Lodging for Travel 00:42:36
  39. Lodging: Value Can Be Excluded If: 00:43:38
  40. Transportation - Employee Benefits 00:45:04
  41. Auto Reimbursements 00:45:15
  42. Business Use Personal Vehicle 00:48:26
  43. #1: Nontaxable 00:50:48
  44. Business Use Personal Vehicle - Example 1 John Levy 00:51:03
  45. #2: Partly Taxable 00:51:39
  46. Business Use Personal Vehicle 2nd Example Joe Bumble 00:51:56
  47. #3 Totally Taxable 00:52:28
  48. Personal Use of a Company Vehicle 00:52:54
  49. Nontaxable Vehicles 00:54:31
  50. Valuing the Vehicle 00:55:27
  51. General Valuation Method 00:57:15
  52. Annual Lease Value Method 00:58:18
  53. Annual Lease Value Method Cont’d 00:59:13
  54. Annual Lease Value Method Cont’d 00:59:14
  55. Annual Lease Value Example Calculations 00:59:43
  56. Annual Lease Value Example 01:00:00
  57. Annual Lease Value Example Calculations 01:00:59
  58. Cents Per Mile Method 01:02:03
  59. Cents Per Mile Method - Formula 01:03:40
  60. Cents Per Mile Method 01:04:25
  61. Commuting Method 01:05:06
  62. Commuting Method - Formula 01:05:38
  63. Commuting Method 01:05:53
  64. Commuting Method - Vehicle Policy 01:06:48
  65. Personal Use of Company Aircraft 01:07:13
  66. General Valuation Method 01:09:18
  67. Noncommercial Flight Valuation Rule 01:10:48
  68. Standard Industry Fare Levels (SIFL) - Formula 01:11:05
  69. Standard Industry Fare Levels (SIFL) - Formula Cont’d 01:11:30
  70. Standard Industry Fare Levels (SIFL) - Formula Cont’d 01:11:45
  71. Chart 1: Unadjusted Charges and Rates 01:11:57
  72. Example With Calculations 01:12:38
  73. Example with Calculations - Step 1 01:13:31
  74. Example with Calculations - Step 2 01:13:53
  75. Example with Calculations 01:13:59
  76. Example with Calculations - Step 3 01:15:04
  77. Mixing Business And Personal 01:15:20
  78. Relocation - Employee Benefits 01:15:43
  79. Relocation 01:15:46
  80. Third-Party Sick Pay - Employee Benefits 01:16:19
  81. Definition of Third Party Sick Pay 01:16:25
  82. Compliance Factors… 01:17:06
  83. Definition of Employer’s Agent 01:19:00
  84. Third-Party Not Employer’s Agent 01:18:59
  85. Taxable Wages 01:19:50
  86. When Nontaxable for FICA and FUTA 01:20:28
  87. Third-Party FICA and FUTA 01:21:12
  88. FIT Withholding 01:21:27
  89. FIT Taxation 01:22:00
  90. Depositing Taxes 01:22:04
  91. Reporting Sick Pay Paid by Employer or Agent 01:22:32
  92. Form W-2 For Employer/Agent 01:22:43
  93. Form W-2 For Employer/Agent Cont’d 01:23:09
  94. Reporting Sick Pay Paid by Third Party 01:23:19
  95. If Liability is Transferred Back 01:24:34
  96. Form-941 01:24:51
  97. Form 941 Liability not Transferred to Employer 01:25:57
  98. Form 941 Liability not Transferred to Employer Example 01:26:16
  99. Form 941 Liability not Transferred to Employer Example Cont’d 01:26:33
  100. Practical Points 01:27:19
  101. Form 8922 01:28:12
  102. Recap 01:29:11
  103. Health Care -  Employee Benefits 01:29:15
  104. Reporting Employer Provided Health Care Coverage 01:29:17
  105. Reporting Employer Provided Health Care Coverage - Informational Reporting 01:29:31
  106. Reporting Employer-Provided Health Care Coverage - Transitional Relief  & COBRA 01:29:36
  107. Reporting Employer-Provided Health Care Coverage - Transitional Relief 01:
  108. Reporting Employer-Provided Health Care Coverage - Amount Reported 01:27:10
  109. Reporting Employer-Provided Health Care Coverage - Aggregate Reportable Costs 01:31:09
  110. Form W-2 Reporting Of Employer-Sponsored Health Coverage Example 01:31:24
  111. Form W-2 Reporting Of Employer-Sponsored Health Coverage Example Cont’d 01:31:43
  112. Other Reporting under ACA - Form 1094-B & Form 1095-B 01:31:44
  113. Other Reporting under ACA - Form 1094-C & Form 1095-C 01:32:02
  114. It All Boils Down to… 01:32:55
  115. Form 1094-B, Form 1095-B, Form 1094-C & Form 1095-C 01:32:56
  116. Form 1094-B, Form 1095-B, Form 1094-C & Form 1095-C Cont’d 01:33:06
  117. Additional Sources for ACA 01:33:26
  118. QSEHRA 01:33:29
  119. Educational Assistance - Employee Benefits 01:33:52
  120. Educational Assistance 01:33:55
  121. Educational Assistance Cont’d 01:34:19
  122. Working Condition Fringe 01:35:17
  123. Gifts, Prizes, And Awards - Employee Benefits 01:35:37
  124. Bonuses, Prizes, And Awards 01:35:50
  125. Bonuses, Prizes, And Awards - Doesn’t Matter 01:38:39
  126. Holiday Gifts/Gift Certificates, Cards 01:39:33
  127. Questions 01:41:11
  128. Speaker Closing 01:48:17
  129. Presentation Closing 01:49:17
  • Accountable Plan 00:42:57, 00:45:42
  • Accounts Payable (AP) 00:03:22, 00:22:28, 00:22:51, 00:45:13, 01:04:01, 01:09:27
  • Affordable Care Act (ACA) 01
  • Annual Lease Valuation (ALV) Method 00:54:04, 00:58:20
  • Audit 00:13:02
  • Bicycle Commuting 00:25:19
  • Cents Per Mile Method 00:54:17, 01:02:03
  • Commuting Valuation Method 00:54:22, 01:05:08
  • De Minimis 00:03:58, 00:11:34, 00:30:30
  • EIN 01:12:14
  • Fair Market Value (FMV) 00:56:23, 00:59:51, 01:39:26
  • Federal Insurance Contributions Act (FICA) 01:19:17, 01:25:09
  • Federal Unemployment Tax Act (FUTA) 01:19:28
  • Form 1094-B 01:31:48
  • Form 1094-C 01:32:02
  • Form 1095-B 01:31:50
  • Form 1095-C 01:32:02
  • Form 8922 01:28:19
  • Form 941 01:22:35, 01:24:51, 01:28:26
  • Form W-2 01:124:46
  • Form W-4 01:21:24, 01:22:51
  • Fringe Benefits 00:00:08, 00:01:40, 00:15:29, 00:18:51, 00:27:27, 00:45:14, 01:36:29
  • General Valuation Method 00:53:52, 00:57:17
  • IRC Section 132 00:02:28, 00:15:26, 00:19:23, 00:25:34
  • Overtime 01:38:25
  • Per Diem 00:45:37, 00:50:02
  • Qualified Small Employer Health Reimbursement Account (QSEHRA) 01:33:31
  • Reciprocal Agreements 00:27:21, 00:29:19
  • Standard Industry Fare Level (SIFL) 01:10:58
  • Tangible Personal Property 00:29:53
  • Tax Cuts and Jobs Act 00:25:21
  • Wage 00:03:10, 01:04:05, 01:10:56, 01:18:56, 01:25:30

Accountable Plan: An accountable plan is a plan that follows the Internal Revenue Service (IRS) regulations for reimbursing workers for business expenses in which reimbursement is not counted as income. ... However, these expenses must be business-related to fall under an accountable plan.

Accounts Payable (AP): The amount of money a company owes creditors (suppliers, etc.) in return for goods and/or services they have delivered.

Annual Lease Valuation: With the annual lease valuation rule, you'll determine the fair market value of the employee's personal use by multiplying the annual lease value of the car by the percentage of personal miles driven.

Audit: A formal examination of an organization's or individual's accounts or financial situation

Bicycle Commuting: Bicycle commuting is the use of a bicycle to travel from home to a place of work or study — in contrast to the use of a bicycle for sport, recreation or touring.

Cents Per Mile Method: This method is one of the simplest to calculate when personal use is involved. With the cents-per-mile method, fair market value of the employee's personal usage of the vehicle is determined simply by multiplying the number of personal miles driven by the IRS Standard Mileage Rate.

Commuting Valuation Method: The Commuting Rule may be used if the sole personal use of an employer-provided vehicle is commuting back and forth from work. Under this rule, you determine the value of a vehicle you provide to an employee for commuting use by multiplying each one-way commute (that is, from home to work or from work to home) by $1.50. If more than one employee commutes in the vehicle, this value applies to each employee.

De Minimis: Too trivial or minor to merit consideration.

EIN: The Employer Identification Number, also known as the Federal Employer Identification Number or the Federal Tax Identification Number, is a unique nine-digit number assigned by the Internal Revenue Service to business entities operating in the United States for the purposes of identification.

Fair Market Value (FMV): The term fair market value is used throughout the Internal Revenue Code among other federal statutory laws in the USA including Bankruptcy, many state laws, and several regulatory bodies. In litigation in many jurisdictions in the United States, the fair market value is determined at a hearing.

Federal Insurance Contributions Act (FICA): The Federal Insurance Contributions Act is a United States federal payroll contribution directed towards both employees and employers to fund Social Security and Medicare—federal programs that provide benefits for retirees, people with disabilities, and children of deceased workers.

Federal Unemployment Tax Act (FUTA): The Federal Unemployment Tax Act (FUTA) is a federal law that imposes an unemployment tax on employers. The FUTA tax funds the federal government's oversight of each state's unemployment program. Only employers pay FUTA tax. You must deposit the tax quarterly and file an annual form.

Form 1094-B: Form 1094-B is essentially a cover sheet used by insurance providers when they send the Internal Revenue Service (IRS) information about who has health coverage that meets the standards of the Affordable Care Act. The 1094-B is a brief form that takes up less than a page.

Form 1094-C: Form 1094-C is used to report to the IRS summary information for each employer and to transmit Forms 1095-C to the IRS. Form 1095-C is used to report information about each employee.

Form 1095-B: Form 1095-B is used as proof of Minimum Essential Coverage (MEC) when filing your state and/or federal taxes. It should be kept with your other tax information in the event the Internal Revenue Service (IRS) or Franchise Tax Board (FTB) requires you to provide it as proof of your health care coverage.

Form 1095-C: Form 1095-C provides information about the health coverage offered by your employer and, in some cases, about whether you enrolled in this coverage. Use Form 1095-C to help determine your eligibility for the premium tax credit.

Form 8922: Use this form to reconcile employment tax returns with Forms W-2 when third-party sick pay is paid.

Form 941: Federal form 941, also called a quarterly federal tax return, is an IRS return that employers use to report their FICA taxes paid and owed for the period. The IRS uses this form to calculate the amount of employer tax payments made during the year as well as the amount of taxes due at the end of the year.

Form W-2: Form W-2 is an Internal Revenue Service tax form used in the United States to report wages paid to employees and the taxes withheld from them. Employers must complete a Form W-2 for each employee to whom they pay a salary, wage, or other compensation as part of the employment relationship. - Wikipedia (https://en.wikipedia.org/)

Form W-4: Form W-4 (otherwise known as the "Employee's Withholding Allowance Certificate") is an Internal Revenue Service (IRS) tax form completed by an employee in the United States to indicate his or her tax situation (exemptions, status, etc.) to the employer.

Fringe Benefits: An extra benefit supplementing an employee's salary, for example, a company car, subsidized meals, health insurance, etc.

General Valuation Method: The general valuation method is determined by the cost an individual would incur to lease the same vehicle under the same terms in the same geographic area.

IRC Section 132: Internal Revenue Code Section 132(a) provides eight types of fringe benefits that are excluded from gross income

Overtime: Overtime is time and a half of what an employee earns for every hour worked over 40 in a workweek. The FLSA salary threshold is the minimum salary employers must pay employees for them to be exempt from overtime wages.

Per Diem: (Latin for "per day" or "for each day") or daily allowance is a specific amount of money an organization gives an individual, often an employee, per day to cover living expenses when traveling for work. - Wikipedia (https://en.wikipedia.org)

Qualified Small Employer Health Reimbursement Account (QSEHRA): Allows small employers to provide non-taxed reimbursement of certain health care expenses, like health insurance premiums and coinsurance, to employees who maintain minimum essential coverage, including an individual Marketplace plan. In many states, QSEHRAs allow small employers to provide their employees additional plan choices without managing group health plan coverage.

Reciprocal Agreements: A reciprocal agreement, also called reciprocity, is an agreement between two states that allows residents of one state to request exemption from tax withholding in the other (reciprocal) state. This can save you the trouble of having to file multiple state returns.

Standard Industry Fare Level (SIFL) : SIFL stands for the Standard Industry Fare level, and it's a multiplier that's purchased by the IRS in order to help you value personal use of business aircraft.

Tangible Personal Property: Tangible Personal Property Tax is an ad valorem tax assessed against the furniture, fixtures and equipment located in businesses and rental property. Ad valorem is a Latin phrase meaning “according to worth”. This tax is in addition to your annual Real Estate or Property Tax.

Tax Cuts and Jobs Act: The Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018, Pub.L. 115–97, is a congressional revenue act of the United States originally introduced in Congress as the Tax Cuts and Jobs Act, that amended the Internal Revenue Code of 1986.

Wage: A fixed regular payment, typically paid on a daily or weekly basis, made by an employer to an employee, especially to a manual or unskilled worker.


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Guest Speaker

  • Vicki M. Lambert, CPP

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