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A highly compensated employee who receives a no-additional cost service, a qualified employee discount or a meal provided at an employer -operated eating facility for employees shall not be permitted to exclude such benefit from his or her income unless the benefit is available on substantially the same terms to:. See paragraph f of this section for the definition of a highly compensated employee. If an employer maintains more than one fringe benefit program, i. Thus, a determination that one fringe benefit program discriminates in favor of highly compensated employees generally will not cause other fringe benefit programs covering the same highly compensated employees to be treated as discriminatory. If the fringe benefits provided to a highly compensated individual do not satisfy the nondiscrimination rules provided in this section, such individual shall be unable to exclude from gross income any portion of the benefit. For example , if an employer offers a 20 percent discount which otherwise satisfies the requirements for a qualified employee discount to all non-highly compensated employees and a 35 percent discount to all highly compensated employees , the entire value of the 35 percent discount not just the excess over 20 percent is includible in the gross income and wages of the highly compensated employees who make purchases at a discount.
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Fringe Benefits and Taxes to Partners, LLC Members and S Corporation Shareholders

Health coverage. Life insurance. Parking fees and transit passes. Flexible spending accounts. Even employer-provided cell phones. Bet you're getting some kind of employer-provided fringe benefits in addition to your salary. But do you know which fringe benefit the IRS considers taxable?
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Qualified Transportation Fringe, Transportation and Commuting Expenses under Section 274

This site uses cookies to store information on your computer. Some are essential to make our site work; others help us improve the user experience. By using the site, you consent to the placement of these cookies. When Jay first joined Ezzon, he became eligible to elect family health care coverage for himself and Lisa. The health insurance premiums are deductible from his pay on a pretax basis, saving tax dollars.
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