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Q&A: When Are Fringe Benefits Taxable?

Is personal use of church equipment considered taxable income?

Members of our church staff occasionally use a church computer, or the church's copy machine, for personal purposes. One of our board members insists we must value these occasional uses of church equipment and report them as taxable income on their W-2 forms. Is this correct?

The tax code specifies that employers can exclude the value of a de minimis benefit it provides to an employee from the employee's wages. A de minimis benefit is any property or service provided to an employee that has so little value (taking into how frequently the employer provides similar benefits to employees) that accounting for it would be unreasonable or administratively impracticable.

Cash and cash equivalent fringe benefits (for example, use of gift card, charge card, or credit card), no matter how little, are never excludable as a de minimis benefit, except for occasional meal money or transportation ...

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Posted:
  • April 1, 2010

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