Overview: Most employers offer several different types of employee benefits, such as health insurance, sick pay, disability pay, workers' compensation insurance and retirement savings plans. Whether employer and employee contributions and benefit payments received by employees are subject to withholding for certain payroll taxes, such as federal income tax (FIT), Social Security and Medicare (FICA) taxes or federal unemployment (FUTA) tax, varies among benefit types.
Trends: The following important issues have an effect on the taxation of employee benefits:
Author: Rena Pirsos, JD, Legal Editor
Under review in relation to the redesigned 2020 Form W-4, and updated to include the aircraft terminal charge and SIFL mileage rates, effective July 1, 2019, and the CONUS per diem rates, effective for travel undertaken on or after October 1, 2019.
Updated to include a new IRC reference date in Hawaii.
Updated to reflect inflation-adjustments to health savings account contribution limits for 2020.
Updated to reflect forthcoming pre-tax commuter benefits.
Under review in relation to the redesigned 2020 Form W-4.
The IRS has released Revenue Procedure 2018-57, which lists the inflation adjustments for a variety of employer-provided fringe benefits for 2019.
Updated to include proposed regulations regarding § 401(k) plan hardship distributions.
The IRS has released the 2019 cost-of-living adjustments (COLAs) to the dollar limitations on benefits and contributions to qualified retirement and deferred contribution plans.
Updated to reflect new information regarding moving expense reimbursements, and meal and entertainment expenses, effective January 1, 2018.
HR guidance on the taxation of employee benefits.