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Taxation of Employee Benefits: Texas

Taxation of Employee Benefits requirements for other states

Federal law and guidance on this subject should be reviewed together with this section.

Author: Vicki M. Lambert, The Payroll Advisor


  • Employer contributions to fund certain benefits as part of a cafeteria plan are exempt from the state unemployment tax. Certain salary deferrals made by employees are always taxable. See Salary Deferrals to IRC § 125 Cafeteria Plans.