4.1. ERMUSR 05-12-2009 - Laserfiche WebLink

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more than 2% of the corporation's stock or stock with more than 2°i° of the voting power. Treat a 2% shareholder as you would a partner in a partnership for fringe benefit purposes, but do not treat the benefit as a reduction in distributions to the 2% shareholder. Meals This section discusses the exclusion rules that apply to de minimis meals and meals on your business premises. De Minimis Meals You can exclude any meal or meal money you provide to an employee if it has so little value (taking into account how frequently you provide meals to your employees) that ac- counting for it would be unreasonable or administratively impracticable. The exclusion applies, for example, to the following items. • Coffee, doughnuts, or soft drinks. • Occasional meals or meal money provided to enable an employee to work overtime. (However, the exclu- sion does not apply to meal money figured on the basis of hours worked.) • Occasional parties or picnics for employees and their guests. This exclusion also applies to meals you provide at an employer-operated eating facility for employees if the an- nual revenue from the facility equals or exceeds the direct costs of the facility. For this purpose, your revenue from providing a meal is considered equal to the facility's direct operating costs to provide that meal if its value can be excluded from an employee's wages as explained under Meals on Your Business Premises later. tf food or beverages you furnish to employees TIP qualify as a de minimis benefit, you can deduct their full cost. The 50% limit on deductions for the cost of meals does not apply. The deduction limit on meals is discussed in chapter 2 of Publication 535. Employee. For this exclusion, treat any recipient of a de minimis meal as an employee. Employer-operated eating facility for employees. An employer-operated eating facility for employees is an eat- ing facility that meets all the following conditions. • You own or lease the facility. • You operate the facility. (You are considered to op- erate the eating facility if you have a contract with another to operate it.) • The facility is an or near your business premises. • You provide meals {food, drinks, and related serv- ices) at the facility during, or immediately before or after, the employee's workday. Exclusion from wages. You can generally exclude the value of de minimis meals you provide to an empioyee from the employee's wages. Exception for highly compensated employees. You cannot exclude from the wages of a highly compensated employee the value of a meal provided at an em- ployer-operated eating facility that is not available on the same terms to one of the following groups. • All of your employees. • A group of employees defined under a reasonable classification you setup that does not favor highly compensated employees. 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°i° 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 top 20°% of employees when ranked by pay for the preceding year. Meals on Your Business Premises You can exclude the value of meals you furnish to an employee from the employee's wages if they meet the following tests. • They are furnished on your business premises. • They are furnished for your convenience. This exclusion does not apply if you allow your employee to choose to receive additional pay instead of meals. On your business premises. Generally, for this exclu- sion, the employee's puce of work is your business prem- ises. For your convenience. Whether you furnish meals for your convenience as an employer depends on ail the facts and circumstances. You furnish the meals to your em- ployee for your convenience if you do this for a substantial business reason other than to provide the employee with additional pay. This is true even if a law or an employment contract provides that the meals are furnished as pay. However, a written statement that the meals are furnished for your convenience is not sufficient. Meals excluded for at/ employees if excluded for more than half. If more than half of your employees who are furnished meals on your business premises are fur- nished the meals for your convenience, you can treat all meais you furnish to employees on your business prem- ises as furnished for your convenience. Food service employees. Meals you furnish to a res- taurant or other food service employee during, or immedi- ately before or after, the employee's working hours are furnished for your convenience. For example, if a waitress works through the breakfast and lunch periods, you can exclude from her wages the value of the breakfast and lunch you furnish in your restaurant for each day she works. Page 14 Publication 15-B (2008)