GLOBAL PAYROLL MAGAZINE
71
States: er ployees
“A key Payroll question when a U.S. firm’s management decides to offer some kind of assistance to employees in these situations is whether the employer’s program is employment tax-free.”
But, for the most part, these benefits need to be paid under qualified plan arrangements that account for where the money is going. If just cash is given with no accounting for what it is used for, the benefit likely is nonqualified and the amounts would need to be included as compensation. What about payments to help employees when their homes or other property are damaged or destroyed?
Some employers feel compelled to provide additional money to help their employees recover. Will that cash or assistance be a tax burden to those receiving it, with Payroll having to accrue amounts paid and fulfill their obligations as if they were an extra salary payment? 9/11 Attacks Gave Rise to Law Fortunately, Section 139 of the I.R.C. carves out an exclusion for when
Made with FlippingBook - Online magazine maker