The tax implications of fringe benefits have changed significantly under the new tax law - make sure you understand the changes for both employers and employees in determining your fringe benefit policies.
The Tax Cuts and Jobs Act made significant changes to the Code’s treatment of employee fringe benefits. Significant changes affecting both employers and employees were made to qualified transportation assistance (including free or subsidized parking), moving costs, employee meals and subsidized dining facilities, and other fringe benefits. Also, for the first time, tax-exempt employers may be required to include some otherwise nontaxable fringe benefits in their employees’ income or, instead, treat the fringe benefit costs as unrelated business taxable income (UBTI), even if they have no other UBTI. Some of the changes pose difficult choices to employers that they may not fully understand or may have already made by default for 2018. Moreover, IRS guidance is still lacking for most of the key changes. This program will explain the basic tax rules for fringe benefits, as well as the Tax Cuts and Jobs Act changes, and will include any late-breaking guidance from the IRS.
Luke Bailey specializes in employee benefits law and executive compensation. He has extensive experience in the tax and fiduciary requirements of qualified retirement and other employee benefit and executive compensation plans of both private and public corporations and state and local governments.
Luke has acted as counsel in connection with the formation of many employee stock ownership plans (“ESOPs”) and has also represented lenders in leveraged ESOP transactions. He has extensive experience with the special problems that can arise in connection with the qualified retirement plans of medical and other professional service organizations, including the “affiliated service group” rules, employee leasing, and out-sourcing. He also has extensive experience in the areas of IRC §§403(b) and 457(b) and (f) plans of state and local governments, universities, and charities, and in welfare benefit plans, including medical plans, “cafeteria” plans, voluntary employee beneficiary associations (“VEBAs”), employee leasing and co-employment, COBRA, individual retirement accounts, and fringe benefits.
A significant portion of Luke’s practice consists of federal income tax compliance work for sponsors of governmental pension plans under IRC §414(d). His work in the executive compensation area includes the design, drafting, and provision of tax and legal advice concerning stock option plans, nonqualified deferred compensation, severance pay plans and arrangements, and executive employment agreements. A substantial portion of Luke’s work in the area of executive compensation consists of advising companies and executives with respect to the “golden parachute” rules of IRC §§280G and 4999, the $1 million limit on public company deductions for nonperformance-based compensation under IRC §162(m), and the rules applicable to nonqualified deferred compensation under §IRC 409A.