Employee Fringe Benefit Lawyers

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What Are Employee Fringe Benefits?

Employee fringe benefits are benefits that employees receive as a result of their employment, including those benefits provided through someone other than an employer. Note that "employee" includes workers who are disabled or retired. Spouses and dependent children of the employee may also claim the employee fringe benefits.

Are Employee Fringe Benefits Taxable as Gross Income?

The federal tax code's defines gross income as any instance of undeniable accession to wealth from whatever source derived. Given this definition, employee fringe benefits are taxable gross income for all taxpayers.

Does the IRS Exclude Some Benefits Not Taxable as Gross Income?

The IRS has designated a number of fringe benefits which are not taxable as gross income. Importantly, the IRS has indicated that the benefits excluded from the general rule that fringe benefits are gross income are only excludable from gross income if they are benefits available to all employees of a company. That is, if not all employees of a company have access to a particular benefit, then that benefit cannot be excluded from an individual taxpayer's gross income no matter what. This is known as the "non-discrimination rule."

For example, if an airline allows its executive employees to fly for free but does not allow its airline attendants to fly for free, then the airline cannot claim the exclusion. The purpose of this rule is to encourage companies to give all their employees access to the same benefits, regardless of where the employees are in the company’s hierarchy.

What Are the Exact Fringe Benefits Excluded from Being Taxed as Gross Income?

The following list represents just a few of the fringe benefits excluded from being taxed as gross income:

Should I Contact an Employment Lawyer?

With all the tax software out there, most people are capable of doing their taxes on their own. More sophisticated and more complex tax returns may require more time and perhaps the advice of a lawyer. Additionally, should you have a dispute with the taxing authority regarding your deductions and exclusions, you may need to go to court. An experienced employment lawyer or tax lawyer may be required.

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Last Modified: 09-15-2014 10:47 AM PDT

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