4.1. ERMUSR 05-12-2009 - Laserfiche WebLink

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located on your business premises. However, the exclu- sion does not apply to an athletic facility for residential use, such as athletic facilities that are part of a resort. Employee. For this exclusion, treat the following individu- als as employees. • A current employee. • A former employee who retired or left on disability. • A widow or widower of an individual who died while an employee. • A widow or widower of a former employee who re- tired or left on disability. • A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your pri- mary direction or control. • A partner who performs services for a partnership. De Minimis (Minimal) Benefits You can exclude the value of a de minimis benefit you provide to an employee from the employee's wages. A de minimis benefit is any property or service you provide to an employee that has so little value (taking into account how frequently you provide similar benefits to your employees) that accounting for it would be unreasonable or administra- tively impracticable. Cash and cash equivalent fringe ben- efits (for example, use of gift card, charge card, or credit card), no matter how little, are never excludable as a de minimis benefit, except for occasional meal money or transportation fare. Examples of de minimis benefits include the following. • Occasional personal use of a company copying ma- chine if you sufficiently control its use so that at least 85% of its use is for business purposes. • Holiday gifts, other than cash, with a low fair market value. • Group-term life insurance payable on the death of an employee's spouse or dependent if the face amount is not more than $2,000. • Meals. See Meals, later. • Occasional parties or picnics for employees and their guests. • Occasional tickets for entertainment or sporting events. • Transportatian fare. See Transportation (Commut- ing) Benefits, later. Employee. For this exclusion, treat any recipient of a de minimis benefit as an employee. Dependent Care Assistance This exclusion applies to household and dependent care services you directly or indirectly pay fior or provide to an employee under a dependent care assistance program that covers only your employees. The services must be for a qualifying person's care and must be provided to allow the employee to work. These requirements are basically the same as the tests the employee would have to meet to claim the dependent care credit if the employee paid for the services. For more information, see Qualifying Person Test and Work-Related Expense Test in Publication 503, Child and Dependent Care Expenses. Employee. For this exclusion, treat the following individu- als as employees. • A current employee. • A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your pri- mary direction or control. • Yourself (if you are a sole proprietor}. • A partner who performs services for a partnership. Exclusion from wages. You can exclude the value of benefits you provide to an employee under a dependent care assistance program from the employee's wages if you reasonably believe that the employee can exclude the benefits from gross income. An employee can generally exclude from gross income up to $5,000 of benefits received under a dependent care assistance program each year. This limit is reduced to $2,500 for married employees filing separate returns. However, the exclusion cannot be more than the earned income of either: • The employee, or • The employee's spouse. Special rules apply to determine the earned income of a spouse who is either a student or not able to care for himself or herself. For more information on the earned income limit, see Publication 503. Exception fer highly compensated employees. You cannot exclude dependent care assistance from the wages of a highly compensated employee unless the ben- efits provided under the program do not favor highly com- pensated employees and the program meets the requirements described in section 129(d) of the Internal Revenue Code. For this exclusion, a highly compensated employee for 2008 is an employee who meets either of the following tests. 1. The employee was a 5°~0 owner at any time during the year or the preceding year. 2. The employee received more than $100,000 in pay for the preceding year. You can choose to ignore test (2) if the employee was not also in the tap 20°'b of employees when ranked by pay for the preceding year. Form W-2. Report the value of all dependent care assis- tance you provide to an employee under a dependent care assistance program in box i 0 of the employee's Form W-2. Include any amounts you cannot exclude from the em- ployee's wages in boxes 1, 3, and 5. Page 8 Publication 15-B (2008)