Employee Benefits

Question 1

Cafeteria Plans

Answer 1

Tax Free Benefits
Qualified Benefits (2 or more included):
- Employer provided Health Insurance
- Long Term or Short Term Disability Coverage (if you pay premiums, it’s tax free)
- Group Term Life up to $50,000
- dependent care assistance up to $5,000
- Section 401K plans
- HSA Contributions
- adoption assistance
- higher ed costs up to $5250
- DEATH BENEFITS ARE ALWAYS TAXABLE

Cash is wages
Non-cash is tax free
- no mandatory waiting period

Question 2

Group Term Life Insurance

Answer 2

*Tax free up to $50,000

Paid by employer for employee life insurance

• excluded from employee if group term life
• limit is $50,000
• over $50,000 the rate is taxed to employee

Question 3

Dependent Care

Answer 3

*Tax free up to $5000
- can be from on site childcare or paid to child care center off-site

Question 4

Tax Free Fringe Benefits

Answer 4

Meals - if provided as a convenience to the employer (i.e. docs and nurses)

Required Lodging - for convenience to the employer (i.e. docs and nurses)

Athletic Facilities at location

Retirement advice provided by employer

No Additional Cost Services (like airline employee using a seat on a plane)

Employee discounts in retail (limited to the gross profit percentage) - must pay employer cost or higher

Coffee and snacks provided by employers

Nominal Gifts for $25 or less

Working Condition Benefits (i.e. subscriptions to periodicals and license fees paid by employer)

Parking - Tax free for parts, its monthly approx $270 for parking or transit passes

Taxable Moving Expenses reimbursement

Question 5

Employee Achievement Awards

Answer 5

for safety and length of service

Tangible Personal Property (not cash, gift cards, tickets to sporting events and theater, vacations, restaurants and hotels - this is all taxable)

Employer has plan in place - $1600 deductible and exempt
No Plan in Place - $400 if the limit

• if volunteers: length of service award is $6000

Question 6

Education Expenses

Answer 6

• Taxable after limit 5250

Payments made to college on behalf of the employee up to $5250 excluded
- tuition, books and supplies

• tuition waiver plan - income is not included income for undergrad only

Question 7

Personal Expenses

Answer 7

• Fully Taxable
• income to the employee unless its for education/student loan reimbursement