4.1. ERMUSR 05-12-2009 - Laserfiche WebLink

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Example. You operate a restaurant business. You fur- nish your employee, Carol, who is a waitress working 7 a.m. to 4 p.m., two meals during each workday. You encourage but do not require Carol to have her breakfast on the business premises before starting work. She must have her lunch on the premises. Since Carol is a food service employee and works during the normal breakfast and lunch periods, you can exclude from her wages the value of her breakfast and lunch. If you also allow Carol to have meals on your business premises without charge on her days off, you cannot ex- clude the value of those meals from her wages. Employees available for emergency calls. Meals you furnish during working hours so an employee will be avail- able for emergency calls during the meal period are fur- nished for your convenience. You must be able to show these emergency calls have occurred or can reasonably be expected to occur. Example. A hospital maintains a cafeteria on its prem- ises where all of its 230 employees may get meals at no charge during their working hours. The hospital must have 120 of its employees available for emergencies. Each of these 120 employees is, at times, called upon to perform services during the meal period. Although the hospital does not require these employees to remain on the prem- ises, they rarely leave the hospital during their meal period. Since the hospital furnishes meals on its premises to its employees so that more than half of them are available for emergency calls during meal periods, the hospital can exclude the value of these meals from the wages of all of its employees. Short meal periods. Meals you furnish during working hours are furnished for your convenience if the nature of your business restricts an employee to a short meal period (such as 30 or 45 minutes) and the employee cannot be expected to eat elsewhere in such a short time. For exam- ple, meals can qualify for this treatment if your peak work-load occurs during the normal lunch hour. However, they do not qualify if the reason for the short meat period is to allow the employee to leave earlier in the day. Example. Frank is a bank teller who works from 9 a.m. to 5 p.m. The bank furnishes his lunch without charge in a cafeteria the bank maintains on its premises. The bank furnishes these meals to Frank to limit his lunch period to 30 minutes, since the bank's peak workload occurs during the normal lunch period. If Frank got his lunch elsewhere, it would take him much longer than 30 minutes and the bank strictly enforces the time limit. The bank can exclude the value of these meals from Frank's wages. Proper meats not otherwise available. Meals you fur- nish during working hours are furnished for your conve- nience if the employee could not otherwise eat proper meals within a reasonable period of time. For example, meals can qualify for this treatment if there are insufficient eating facilities near the place of employment. Meats after work hours. Meals you furnish to an em- ployee immediately after working hours are furnished for your convenience if you would have furnished them during working hours for a substantial nonpay business reason but, because of the work duties, they were not eaten during working hours. Meals you furnish to promote goodwill, boost mo- rale, or attract prospective employees. Meals you fur- nish to promote goodwill, boost morale, or attract prospective employees are not considered furnished for your convenience. However, you may be able to exdlude their value as discussed under De Minimis Meals, earlier. Meals furnished on nanworkdays or with lodging. You generally cannot exclude from an employee's wages the value of meals you furnish on a day when the employee is not working. However, you can exclude these meals if they are furnished with lodging that is excluded from the employee's wages as discussed under Lodging on Your Business Premises, earlier. Meals with a charge. The fact that you charge for the meals and that your employees may accept or decline the meals is not taken into account in determining whether or not meals are furnished for your convenience. S corporation shareholder-employee. For #his exclu- sion, do not treat a 2% shareholder of an S corporation as an employee of the corporation. A 2% shareholder is someone who directly or indirectly owns (at any time dur- ing the year) more than 2°~0 of the corporation's stock or stock with more than 2% 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. Moving Expense Reimbursements This exclusion applies to any amount you directly or indi- rectlygive to an employee, (including services furnished in kind) as payment for, or reimbursement of, moving ex- penses. You must make the reimbursement under rules similar to those described in chapter 11 of Publication 535 for reimbursement of expenses for travel, meals, and en- tertainment under accountable plans. The exclusion applies only to reimbursement of moving expenses that the employee could deduct if he or she had paid or incurred them without reimbursement. However, it does not apply if the employee actually deducted the expenses in a previous year. Deductible moving expenses. Deductible moving ex- penses include only the reasonable expenses of: • Moving household goods and personal effects from the former home to the new home, and • Traveling (including lodging) from the former home to the new home. Deductible moving expenses do not include any ex- pensesfor meals and must meet both the distance test and the time test. The distance test is met if the new job location is at least 50 miles farther from the employee's old home than the old job location was. The time test is met if the employee vrorks at least 39 weeks during the first 12 months after arriving in the general area of the new job location. For mare information on deductible moving expenses, see Publication 521, Moving Expenses. Employee. For this exclusion, treat the following individu- als as employees. Publication 15-8 (2005) Page 15