Employee Benefits and Fringe Benefits

Categories: Federal Tax, IRS CE
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About Course

This two-hour continuing education course provides tax professionals with a practical understanding of the federal tax rules governing employee fringe benefits. The course is designed for enrolled agents and other tax return preparers who advise business clients on compensation and benefits design, as well as those preparing individual returns for employees receiving fringe benefits.

Participants examine the statutory fringe benefit exclusions under IRC §132, group-term life insurance imputed income under IRC §79, and cafeteria plan rules under IRC §125. The course provides detailed coverage of Dependent Care and Educational Assistance Programs, the meals and lodging exclusion, employee achievement awards, and the distinction between traditional HRAs, QSEHRAs, and Individual Coverage HRAs. The course concludes with nondiscrimination testing, Form W-2 and Form 1099 reporting requirements, and common practitioner errors in fringe benefit compliance.

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What Will You Learn?

  • Identify the statutory categories of fringe benefits excludable under IRC §132
  • Calculate the taxable cost of group-term life insurance coverage over $50,000 under IRC §79
  • Apply cafeteria plan rules under IRC §125, including the use-or-forfeit rule and permitted election changes
  • Apply the meals and lodging exclusion under IRC §119 and the employee achievement award rules under §274(j)
  • Distinguish between traditional HRAs, QSEHRAs, and Individual Coverage HRAs
  • Apply nondiscrimination rules and identify proper Form W-2 and Form 1099 reporting for fringe benefits

Course Content

Module 1 – Statutory Fringe Benefit Exclusions — IRC §132
This module covers the statutory fringe benefit categories excludable under IRC §132 — working condition, de minimis, no-additional-cost service, and qualified employee discount exclusions, the qualified transportation fringe benefit, and the permanent OBBBA elimination of the moving expense reimbursement exclusion (with Armed Forces and intelligence community exceptions) and the bicycle commuting reimbursement exclusion.

  • Statutory Fringe Benefit Exclusions — IRC §132

Module 2 – Group-Term Life Insurance, Cafeteria Plans, and Dependent Care/Educational Assistance
This module addresses group-term life insurance imputed income under IRC §79, cafeteria plan election rules under IRC §125 including the use-or-forfeit rule and permitted election change events, Dependent Care Assistance Programs under IRC §129, and Educational Assistance Programs under IRC §127.

Module 3 – Meals and Lodging, Achievement Awards, HRAs, and Adoption Assistance
This module examines the meals and lodging exclusion under IRC §119, employee achievement awards under IRC §274(j), the distinction between traditional HRAs, QSEHRAs, and Individual Coverage HRAs, and the adoption assistance program exclusion under IRC §137.

Module 4 – Nondiscrimination, Reporting, Common Errors, and Circular 230 Compliance
The final module covers nondiscrimination rules applicable to fringe benefit plans, Form W-2 and Form 1099 reporting requirements, common practitioner errors in fringe benefit compliance, and Circular 230 due diligence standards for advising employer clients.

Final Assessment – Employee Benefits and Fringe Benefits
You have completed a comprehensive review of the federal tax rules governing employee fringe benefits, covering statutory exclusions under IRC §132, group-term life insurance, cafeteria plans, dependent care and educational assistance programs, meals and lodging, employee achievement awards, health reimbursement arrangements, and adoption assistance. You are now prepared to demonstrate your understanding of the key concepts. The following final examination assesses your knowledge of the material covered in all four modules. A passing score of 70% is required to successfully complete the course.

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