IRS Publication 15-B (Employer’s Tax Guide to Fringe Benefits (For Use in 2018))
Available at https://www.irs.gov/pub/irs-prior/p15b–2018.pdf
Publication 15-B has been revised for 2018 to reflect recent legislative and regulatory developments, including changes made by the Tax Cuts and Jobs Act (see our Checkpoint article) that suspended or eliminated the income exclusion or tax deduction for certain fringe benefits. Here are highlights:
Moving Expense Reimbursements. The entire discussion of moving expense reimbursements has been removed due to suspension of the exclusion (and the Code § 217 moving expense deduction) for years beginning after 2017 and before 2026 (except in connection with certain moves by servicemembers on active duty).
Qualified Transportation Plans. In explaining that the deduction for qualified transportation benefits has been eliminated, the publication clarifies that the deduction is unavailable regardless of whether the benefit is provided by the employer, through a bona fide reimbursement arrangement, or through a compensation reduction agreement. The discussion of qualified bicycle commuting reimbursements has been removed due to suspension of the exclusion for those benefits for years beginning after 2017 and before 2026.
Qualified Small Employer Health Reimbursement Arrangements (“QSEHRAs”). A discussion of QSEHRAs (see our Checkpoint article) has been added to the section on accident and health benefits.
Employee Achievement Awards. The discussion of employee achievement awards has been revised to incorporate the new definition of tangible personal property that limits the types of awards that can be excluded from income.
Employer-Provided Meals. The publication notes changes in the deduction rules for employer-provided meals that eliminate the availability of a 100% deduction for food and beverage expenses that are excludable as a de minimis fringe benefit.
Company Cars. Portions of the publication that previously explained how employers could include the entire annual lease value of company cars in employees’ wages, and that employees could then take an itemized deduction for the business use of their cars, have been deleted due to the suspension of miscellaneous itemized deductions for years after 2017 and before 2026.
In addition to these items, the 2018 version of Publication 15-B provides the 2018 dollar amounts for various benefit limits and definitions, such as the monthly limits under qualified transportation plans; the limit on health flexible spending arrangement (health FSA) salary reductions; the maximum amount of payments and reimbursements under a QSEHRA (for the transportation, health FSA, and QSEHRA amounts, see our Checkpoint article); the minimum deductibles and maximum out-of-pocket expenses for high-deductible health plans and the maximum contributions permitted to HSAs (see our Checkpoint article and our Checkpoint article); and the 2018 standard mileage rate for valuing an employee’s personal use of an employer-provided vehicle (see our Checkpoint article). The publication also explains a new Code provision allowing qualified employees to elect to defer income attributable to certain stock options and restricted stock units for up to five years if the employer’s stock was not readily tradable on an established securities market during any prior calendar year, and certain other requirements are met.
EBIA Comment: Publication 15-B typically changes little from year to year. But this year’s version is different, offering the first official IRS interpretation of some of the fringe benefit changes made by the Tax Cuts and Jobs Act. Like previous versions, this version of Publication 15-B does not provide complete coverage of the many rules it summarizes. For example, the transportation plans discussion fails to mention that tax-exempt employers must now recognize unrelated business taxable income on transportation benefits that would not be deductible under Code § 274. For more information on the various fringe benefits addressed in Publication 15-B, see EBIA’s Fringe Benefits manual; for more information on HSAs and HRAs (including QSEHRAs), see EBIA’s Consumer-Driven Health Care manual; and for more information on cafeteria plans, health FSAs, and dependent care assistance programs (DCAPs), see EBIA’s Cafeteria Plans manual.
Contributing Editors: EBIA Staff.