House Looks At Fringe Benefits

Harkavy, Jon; Aronstein, Haren R.
December 1983
Risk Management (00355593);Dec83, Vol. 30 Issue 12, p8
Trade Publication
This article reports on the approval of a bill by the U.S. House Ways and Means Committee, as of December 1983, which would establish permanent rules to govern the types of fringe benefits that are not taxable to the employee. The bill would not affect benefits which are classified non-taxable prior to the bill under specific Internal Revenue Code provisions. Any benefit which does not qualify under this bill or an existing statute would be taxable to the employee at the excess of its fair market value over any amount paid by the employee for the benefit. Five categories of non-taxable employee benefits would be: (1) non additional cost services, (2) qualified employee discounts, (3) working condition fringe benefits, (4) de minimus fringe benefits, and (5) scholarships. Even if the benefit falls into one of the categories above, it must be offered to employees on a non-discriminatory basis to retain its tax-exempt status. This means that the benefits would have to be available on substantially the same terms to each group of employees. Passage of the bill by the full U.S. House of representatives is a strong possibility. As of December 1983, what action, if any, the U.S. Senate Finance Committee will take on the fringe benefit issue is unclear.


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