Four categories – §132(a)—extends benefit to spouse and dependent children for (a)(1), (2) and parents for air travel §132(h)(2),(3).
No additional cost service – service offered in ordinary course of business of employer (like space-A travel)
Qualified Employee Discount – §132(a)(2) – as long as discount is for property or services (not for investment but something offered for sale to customers) and doesn’t exceed (a) in case of property gross profit percentage of price for customers [(aggregate sales – cost of goods sold/aggregate sales)] or (b) for services, a 20% discount.
If discount is 45% and gross profit is 40%, 5% is income.
Working condition fringe – §132(a)(3) – if paid for by employee would be deductible by employee under §162 as trade or business expense or under §167 for depreciation – compare employee to self-employed – paying $ to run office (secretaries, A/C, flying to produce income)
De minimis fringe – excluded when accounting for them would be “unreasonable or administratively impractical”
Occasional meal money or local transportation fee excludable as de minimis if it’s occasional, provided to enable overtime work or meal money. Reg §1.132-6(d)(2)(i)
Cab fare – special rule for employer-provided transportation in certain circumstances – excess over $1.50 excluded if employee would be in unsafe circumstances – Reg. §1.132-6(d)(2)(iii). Not available if compensation over $100,000.
Qualified transportation fringe – free parking for example.