Question

Describe the tax treatment of a de minimus fringe employee benefit and give an example.

Answer 1

DE MINIS FRINGE BENEFITS

Any property or services the value of which is so small or minimal as to make accounting of it is unreasonable is known as De Minis Fringe Benefits.

De Minis Fringe Benefits are provided by employer and are not included in employees' income or is excludable.

An important fact about De Minis Fringe Benefits is that these type of benefits are generally occasional or unusual in frequency means these benefits are not provided by employer on daliy basis or frequently. these are provided occasionally

EXAMPLE OF DE MINIS FRINGE BENEFITS

(1) Personal use of cell phone provided by employer for business purpose.

(2) Occasional tranpotation expense for working overtime.

(3) Occasional tickets for entertainment events.

(4) Occasional snakes, coffee or tea.

(5) Occasional use of photocopierof employer

(6) Occasional meal money. etc.

TAX TREATMENT

De Minis Fringe Benefits are non taxable or exempt from taxation. These are not included in employee's income or are deductibe from employee's gross income. So these are non taxable.