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R
RENJ33
October 12, 2023
Question

Employee Non taxable fringe benefits

  • October 12, 2023
  • 1 reply
  • 0 views

My company will be offering a non-taxable fringed benefits to employees. Those benefits are undergraduate tuition reimbursement and student loan repayment up to the IRS limit of 5250 per year. We can’t seem to find a way to record these payments on the employee w2 without making those payments taxable. My understanding is these payments must be on a w2 under box 12. Can you help us?

 

1 reply

J
JamaicaA
October 12, 2023

Help has arrived, @RENJ33. I'm here to assist you with documenting the non-taxable fringe benefits of your employees. Properly recording these payments under the accurate box is essential, and I'm happy to share some information that can help you with it.

 

Your employees’ W-2s have two boxes that are relevant to fringe benefits. Box 12 is for employer-sponsored health insurance, while Box 14 is for fringe benefits where the correct descriptions and amounts are recorded. When running payroll, you can choose whether the employee or your business will pay the taxes. 

 

FBT or fringe benefits tax is calculated on the taxable value of the benefit and is separate from income tax. In QuickBooks Online, there are several preset fringe benefits to choose from, such as:

 

 

It's important to note that the fringe benefit needs to be reported on a paycheck before the end of the calendar year so it can be taxed appropriately and reported on your employees’ W-2s. For a complete guide on the process, refer to this article: Step 2: Add the fringe benefit to your employee’s paycheck.

 

To learn more about the W-2s and its boxes, check out these resources:

 

 

With this information, you should be able to determine the right box for the non-taxable fringe benefits. If you have follow-up questions regarding W-2 or any other payroll forms, feel free to ask me. I'm always ready to help you out.

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