De Minimis Fringe Benefit Exclusion – Paul Gaulkin CPA

blocks spelling benefitsDe minimis fringe benefits occur when the value of the property or service provided to an employee is so minimal that the accounting to record it would be unreasonable. Examples of de minimis fridge benefits include:

1. Having a secretary type a personal letter for an employee
2. Occasional personal use of the company copy machine
3. Occasional parties or picnics for employees
4. Traditional holiday gifts that have a small fair market value
5. Tickets given out for entertainment events that have a small fair market value
6. Coffee and donuts furnished to employees
7. Occasional dinner money or taxi fare due to overtime work

This list is not supposed to be comprehensive, many more benefits could be added depending on an employees specific employment situations. The point to understand is very small products or services that have been furnished to a taxpayer will be excludable from gross income.

De Minimis Fringe Benefit Exclusion

While many of these employee benefits are typically not included in an employee’s gross income, in most circumstances, the employer is allowed a deduction for costs incurred.

Disallowed Exclusion

Any cash benefit or its equivalent (such as the use of a company credit card) cannot be excluded as a de minimis benefit under any circumstance. In addition, the following benefits will never be excludable as de minimis fridge benefits:

1. Season tickets to sporting events or theatrical events

2. The commuting use of an employer provided car or other vehicle more than once a month

3. Membership in a private country club or athletic facility

4. Use of employer owned or lease facilities, such as an apartment or hunting lodge

Again, this is not a comprehensive list, and therefore, many other products and services furnished to employees along these lines will not be excludable from gross income as de minimis fridge benefits.

About Paul Gaulkin CPA

Paul Gaulkin is a Certified Public Accountant and enrolled with the U.S. Treasury to practice before the IRS. Mr. Gaulkin possesses unique technical knowledge in the process of securing relief for taxpayers nationwide with IRS and State tax problems. With an accounting degree from Florida International University, he is able to transform complex tax and accounting problems into easy to understand solutions.


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