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Understanding De Minimis Fringe Benefits |
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De Minimis Fringe Benefits
An employer may provide services or property to an employee that is of small value without including the value in the employee’s income. Because of their small value and infrequency, these fringe benefits are considered minimal. The following conditions need to exist to define a de minimis fringe benefit.
• The value of the benefit is so small that accounting for it would be unreasonable or impracticable for the employer.
• The frequency of employer providing this benefit needs to be looked at to determine if the value is small enough not to include in employee’s taxable wages.
The following are examples of items that would be considered de minimis fringe benefits:
• Use of company phones for occasional local phone calls
• Occasional tickets to sporting events
• Occasional use of the copier
• Holiday gifts, such as turkeys, cakes, cookies, or candy
• Occasional meals, supper money, or cab fare for employees who work late
Cash, no matter how little, is never excludable as a de minimis benefit, except for occasional meal money or transportation fare. |
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