construction; government contractor and technology; not-for-profit; real estate; emerging growth companies
tax
Abstract:
For many companies, a large portion of the total compensation package they offer employees is made up of noncash benefits. Generally, when an employer provides noncash benefits to an employee, the employee is taxed on the fair market value of those benefits, unless an exception to taxation applies.
A common example is employer-provided or subsidized health insurance. An employer also gains from compensating its employees with the use of tax-free benefits, such as educational benefits, instead of additional cash compensation.
Tax-free education benefits may be more valuable to employers and employees in a slowing economy.
An employer can provide tax-free education benefits by developing and maintaining an educational assistance program or by taking advantage of the tax exclusion for working condition fringe benefits. Both of these approaches have distinct advantages, disadvantages, and requirements for tax-free qualification, all of which are highlighted in our Full Article that can be downloaded below.