Constructive payment occurs when your employe has the option of receiving payment but instead chooses to defer payment. B. Fringe Benefits 1. When your employe has an option to take a portion of the employer-paid contribution in cash, that portion, whether taken in cash or left in the fund, is considered to be constructively received. Compensation deferred under Nonqualified Plans Payments from non-qualified plans are taxable as of the later of the date the services are performed, or the date there is no substantial risk of forfeiture of the rights to such amount. This is an employer contribution to your employe's account out of company profits, when the amount is not available to your employe until separation.
Unexpended amounts paid to employes at year-end are taxable.
Your employe pays for particular benefits with pre-tax dollars through a salary reduction agreement. Premium and Flexible Spending Account. You deduct pre-tax dollars through a salary reduction agreement to pay for employe selected benefits, based on your employe's estimate of charges. Any unexpended monies reverts to you, the employer. You provide your employe with a fixed amount to purchase benefits.