Source: https://www.mass.gov/guides/employee-fringe-benefits
Timestamp: 2019-04-22 21:57:36+00:00

Document:
This guide is not designed to address all questions which may arise nor to address complex issues in detail. Nothing contained herein supersedes, alters or otherwise changes any provision of the Massachusetts General Laws, Massachusetts Department of Revenue Regulations, Department rulings or any other sources of the law.
Employee fringe benefits are forms of pay for the performance of services.
The employer allows the employee to use a business vehicle to commute to and from work.
They’re specifically excluded by law.
Employees are generally the recipients of fringe benefits if they perform the services for which the fringe benefits are provided. Employees are considered recipients even if fringe benefits are given to another person, such as members of the employees' families.
The car is considered to have been provided to the employee, not the spouse.
The exclusion of certain benefits from gross income.
Made available to everyone, not just highly compensated employees.
For Massachusetts purposes, the employer reports taxable fringe benefits in box 16, State Wages, tips, Etc.
Full value noted in Box 12.
as defined in I.R.C. § 152.
Who doesn’t provide over half of his or her own support for the calendar year.
Receives over one-half of his or her support from the taxpayer.
Effective for taxable years beginning after December 31, 2004, for federal purposes, this notice expands the definition of dependent at I.R.C. § 152 to eliminate the gross income limit for a qualifying relative.
An employee may exclude from gross income the value of employer-provided health insurance coverage for a child who, while not a “qualifying child,” meets the definition of a “qualifying relative” determined without regard to the child’s gross income.
The taxpayer provides over half of the child’s support for the calendar year.
In such a case, the child is considered a dependent and there is no federal imputed income charged to the employee.
because the child provides at least half of his or her own support, an amount may be considered imputed income that is included in gross income.
The Act generally requires group health plans and health insurance issuers to provide coverage for dependent children up to age 26.
In addition, it broadens the exclusion from gross income for employer-provided health care benefits for an employee's child to the end of the year in which the child attains age 26.
Effective March 30, 2010, the Act amended I.R.C. § 105 to exclude from an employee's gross income any employer-paid expenses incurred for the medical care of an employee's child who hasn’t attained age 27 as of the end of the tax year.
Their dependents, as defined in I.R.C. § 152.
Effective March 30, 2010, the exclusion extends to coverage for an employee's child who hasn’t attained age 27 as of the end of the tax year.
Effective for tax years beginning on or after January 1, 2010, Massachusetts follows the federal treatment of I.R.C. §§ 105 and 106 for exclusions from gross income for employer-provided health care benefits.
Notwithstanding the general Massachusetts tie-in to federal income and exclusion rules as of January 1, 2005.
Thus, to the extent employer-provided health care benefits are excluded from federal gross income, such amounts are likewise excluded from Massachusetts gross income.
Haven't reached the age of 27 by end of the year.
There was previously a discrepancy between federal and Massachusetts gross income exclusions for this class of taxpayers. The Massachusetts exclusion has now been broadened to match the federal exclusion.
Effective for tax years ending on or after January 1, 2009, Massachusetts conforms to the current Code with regard to the federal exclusion from gross income of the COBRA subsidy under I.R.C. § 139C.
The American Recovery and Reinvestment Act of 2009 (P.L. 111-5 or "ARRA") added new I.R.C. § 139C which provides an exclusion from federal gross income for a 65% subsidy for COBRA continuation premiums for up to 9 months for certain workers who have been involuntarily terminated and for their families.
This subsidy also applies to health care continuation coverage if required by states for small employers.
Gross income of an employee doesn’t include the value of amounts paid by the employer for qualified adoption expenses in connection with the adoption of an eligible child. In the case of an adoption of a child with special needs, the exclusion applies regardless of whether the employee has qualified adoption expenses.
Amended and in effect on January 1, 2005.
Any federal tax law changes to these exclusions won't be automatically adopted. Massachusetts will continue to follow the Code of January 1, 2005.
Other athletic club located on the business premises.
The statutory nontaxable benefits provided to key employees exceed 25 percent of the aggregate of such benefits provided for all employees under the plan.
The participants may choose among 2 or more benefits consisting of cash and qualified benefits.
The term "qualified benefit" means any benefit which is not includible in the gross income of the employee by reason of a specific I.R.C. provision.
$2,500 in the case of a separate return by a married individual.
Any excess amount is included in gross income in the taxable year in which the dependent care services were provided.
The fair market value of care in a day-care facility provided or sponsored by employee's employer.
Also see Child and dependent related deductions.
Employer reports dependent care benefits in box 10 of Form W-2. The employer will include any dependent care benefits over $5,000 in wages shown in box 1 and 16 of Form W-2.
Occasional typing of personal letters by a company secretary.
The revenue derived from such facility normally equals or exceeds the direct operating costs of such facility.
that can easily be exchanged for cash are includible in gross income.
Any federal tax law changes to these exclusions won’t be automatically adopted.
Massachusetts will continue to follow the Code of January 1, 2005.
Also see Education related deduction.
The discount on services does not exceed 20% of the price at which the services are being offered for sale to customers.
Employee discounts mean the amount by which the price of qualified property or services provided to an employee for use by the employee is less than the price of such property or services that is offered to customers.
Employers who provide their employees with cars (or other highway motor vehicles) must determine the actual value of the employees' personal use of the cars. The value for personal use is considered a non-cash fringe benefit that must be included in the employees' gross income.
An employer must determine the actual value of this fringe benefit to include in employees' income.
The actual value of the car as if the employees used it entirely for personal purposes (100% income inclusion).
If an employer includes 100% of the value in employees' gross income, employees may deduct the value of the business use of the car that is computed on U.S. Form 2106.
the personal use would not be subject to tax.
Furnished for the convenience of the employer.
If taxpayer is employed by an educational institution and taxpayer (or taxpayer's spouse and dependents) are provided qualified campus lodging for use as a residence, the excess of the fair rental value over the amount of rent the taxpayer pays is included in gross income.
Increased death benefit gratuity of $12,000.
Gross income for both federal and Massachusetts purposes doesn’t include qualified moving expense reimbursements. These are amounts received from an employer as payment for or reimbursement of expenses that would be deductible as moving expenses if directly paid or incurred by the employee. Therefore, these reimbursements may not be included in the calculation of the Moving Expense - Schedule Y Deduction.
Effective January 1, 2005, Massachusetts adopts the federal treatment for the exclusion of Moving Expense Reimbursement under the Internal Revenue Code, as amended and in effect on January 1, 2005.
Any federal tax law changes to this exclusion won’t be automatically adopted. Massachusetts will continue to follow the "Code" of January 1, 2005.
The employer does not incur any substantial additional cost in providing these services to the employee.
Example: An individual is employed as a flight attendant for a company that owns both an airline and a hotel chain. The company allows the employee to take personal flights (if there is an unoccupied seat) and stay in any one of their hotels (if there is an unoccupied room) at no cost to the employee. The value of the personal flight isn’t included in employee's gross income. However, the value of the hotel room is included in the employee's gross income because the employee does not work in the hotel business.
As a result of Code Update, Massachusetts adopts the federal exclusion for the employee fringe benefit of retirement planning advice or information provided to an employee and his spouse by an employer maintaining a qualified employer plan.
provided by employee’s employer may not be excluded.
This exclusion was due to expire for tax or plan years beginning after December 31, 2010.
$130 per month for combined transit pass and commuter highway vehicle transportation benefits, that are a reduction in salary.
Massachusetts doesn’t adopt this exclusion amount increase to the transit pass and commuter highway vehicle transportation benefits, given that it was enacted subsequent to January 1, 2005.
Massachusetts adopts this federal exclusion under the Internal Revenue Code, as amended and in effect on January 1, 2005. Any federal tax law changes to these exclusions won’t be automatically adopted. Massachusetts will continue to follow the Code of January 1, 2005. Massachusetts does, however, adopt the IRS's Revenue Procedure/inflation adjustment formula used in determining annual exclusion amounts.
Also see the Commuter deduction page.
The value of property or service provided to employees by an employer is excluded from gross income if the employees would have been allowed to deduct such expenses under I.R.C. § 162 or 167 if they had paid for them.
For example, the cost of a subscription to an engineering trade magazine provided by an employer isn’t included in gross income since the cost would have been deductible to the engineer if he had paid for the subscription himself.
Copy of U.S. W-2C - Statement of Corrected Wage and Tax Amounts, or letter from employer verifying excluded employer provided reimbursement amount.
Copy of U.S. Form 3903 - Moving Expenses (if applicable).
Also see Amend your tax return or request an abatement of tax.

References: § 152
 § 152
 § 105
 § 152
 § 139
 § 139
 § 162