Fringe Benefits: Congress Must Make Up Its Mind

Article Abstract:

Federal income tax on fringe benefits has often wrought confusion. Uneven administration of the tax has caused much negative public opinion. The Treasury Department has proposed two sets of separate guidelines, but Congress has countered with a moratorium on fringe benefits regulations on three occasions. One of these moratoriums is about to expire, which presents the problem of further moratoriums, new fringe benefit legislation, or allowing the Treasury Department to decide the tax treatment. Two legislative bills are before Congress at present: S.1817, and H.R.3525. These bills are analyzed. They both provide for common practices such as parking, qualified employee discounts, recreational premises at work and tuition deals. They also both address benefits not delineated specifically; these will be taxed at fair market value. H.R.3525 is a stricter edition than S.1817, since it includes several non-discrimination rules for covered fringes, and more demanding qualification criteria. It is also more limiting as to certain industries' practices. H.R.3525 will alter Internal Revenue Code Section 125, which speaks to cafeteria plans, and this is expected to prove problematic.

United States. Congress

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Hearing Examines Supplemental Retirement Act of 1983

Article Abstract:

A recent meeting of the Senate Finance Sub committee on Savings, Pension, and Investment Policy focused on four tax measures; with special attention for those measures associated with S.1066, the Supplement of Retirement Benefit Act of 1983. This bill would allow an employer to furnish qualified supplemental benefits through their own contributions. Maximum allowances for this will be based on the larger amount of three per cent of the primary retirement benefit or a percentage of that benefit matching a seven-year average of the cost of living increase. Qualified supplemental benefits are not subject to inclusion in income until the benefits are actually paid to the employee. This is true in spite of the fact that the worker has a nonforfeitable benefit right earlier than retirement. Benefit guarantees and political support for the bill are analyzed.

Finance, Investments, Appointments, resignations and dismissals, Wages, Wages and salaries, United States. Congress. Senate, Cost of living adjustment

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