TN 27 (05-12)

A. Fringe benefits which are not wages

Effective January 1, 1985, the following five categories of fringe benefits are not wages:

• De minimus fringe, see RS 01402.045.

• Gyms and other athletic facilities, see RS 01402.065.

• No additional cost service, see RS 01402.070.

• Qualified employee discount, see RS 01402.075.

• Working condition fringe, see RS 01402.080.

NOTE: Except for de minimus fringes, these rules do not apply to fringes discussed in other sections of the Internal Revenue Code (IRC).

B. Qualifying as an “employee” for fringe benefits

Some individuals who are not employees, i.e., no employment relationship exists, may nevertheless qualify for treatment as employees for fringe benefits; provided the service or discount offered by the employer is consistent with the service or discount offered to customers in the ordinary course of the employer's line of business. (For information on no additional cost service, see RS 01402.070. For details on qualified employee discount, see RS 01402.075.)

With respect to an employer's line of business, the term employee includes the:

• Retired and disabled employees

• Surviving spouse of the employee

• Spouse or dependent children