Chapter 2
Fringe Benefit Exclusion Rules

This section discusses the exclusion rules that apply to fringe benefits. These rules exclude all or part of the value of certain benefits from the recipient's pay.

The excluded benefits are not subject to federal income tax withholding. Also, in most cases, they are not subject to social security, Medicare, or federal unemployment tax and are not reported on Form W-2.

This section discusses the exclusion rules for the following fringe benefits.

• Accident and health benefits.
• Achievement awards.
• Archer medical savings accounts.
• Athletic facilities.
• De minimis (minimal) benefits.
• Dependent care assistance.
• Educational assistance.
• Employee discounts.
• Employee stock options.
• Group-term life insurance coverage.
• Lodging on your business premises.
• Meals.
• Moving expense reimbursements.
• No-additional-cost services.
• Transportation (commuting) benefits.
• Tuition reduction.
• Working condition benefits.

See Table 2-1 for an overview of the employment tax treatment of these benefits.

Table 2-1. Overview of Employment Tax Treatment of Fringe Benefits

Previous| First | Next

Publication Index | IRS-Forms Main | Home