Non-cash compensation, commonly called fringe benefits, is generally not considered IMRF earnings with several notable exceptions.
Certain types of non-cash compensation are taxable income and Social Security wages even though they are not reportable to IMRF. You should refer to the pertinent IRS publications to determine the tax and Social Security treatment of all items of compensation paid or provided to your employees.
4.24 C. Non-Cash Earnings explains the withholding and reporting procedures for any non-cash compensation which is to be reported to IMRF as earnings.
The value of meals furnished to employees is not considered IMRF earnings if:
Furnished on the employer’s premises, or
Furnished for the convenience of the employer.
Meals furnished before or after working hours or on non-work days generally are not considered to be furnished for the convenience of the employer.
If the employee has the option of receiving meals or cash, the value of the meals is considered IMRF earnings.
Tax treatment of meals is explained in IRS Publication 15-B, ”Employer’s Tax Guide to Fringe Benefits.”
The value of lodging furnished to employees is not considered IMRF earnings if:
Furnished on the employer’s premises,
Furnished for the convenience of the employer, and
The employee is required to accept the lodging as a condition of employment and cannot accept cash or other compensation instead.
If the lodging is furnished under any other circumstances, the value is considered IMRF earnings. Cash allowances for lodging are considered earnings only when the employer has a taxable allowances resolution (Form 6.74) on file with IMRF.
Tax treatment of lodging is explained in IRS Publication 15-B, ”Employer’s Tax Guide to Fringe Benefits.”
Amounts paid to members to buy uniforms are excluded from IMRF earnings, unless the employer acts to allow reporting of taxable expense allowances. See 3.96FF.
Tuition payments are excluded from IMRF earnings.
Business use of a personal vehicle: Vehicle allowances paid to compensate for the business use of a personal vehicle are not IMRF earnings. This is true even if the allowance is a flat amount paid monthly, unless the employer acts to allow reporting of taxable expense allowances. See also Section 3.96 FF.
If prior to November 17, 2017 an employer adopted a resolution allowing IMRF reporting of vehicle allowances, the employer can only report those allowances for employees who first began IMRF participation with that employer before August 25, 2017. IMRF will not accept any new employer resolutions for vehicle allowances on or after November 17, 2017.
Personal use of a vehicle furnished by an employer: The value of the personal use of a vehicle furnished by an employer is considered IMRF earnings. The value is to be determined in the same manner as in determining value for income tax and Social Security tax on W-2 statements. We call your attention to these items:
Use of an employer vehicle to commute to work is arbitrarily valued at $1.50 per employee for each one-way trip, other than control employees (executive personnel) whose use is valued at fair market value.
Specified record keeping requirements are issued by the IRS. The method of valuing vehicle use is explained in IRS Publication 15-B, “Employer’s Tax Guide to Fringe Benefits.”
Personal Use of Listed Property - See Section 3.96 F. 6 below about Personal Use of Listed Property.
Reimbursements made for vehicle and travel expenses under an accountable plan are never reportable. Non-taxable expense reimbursements are not included as earnings and are not to be reported to IMRF. This is true even if an employer elected to make taxable expense allowances reportable.
Please see the Vehicle Allowances as IMRF Earnings Quick Reference Card for further explanation.
Personal use of certain employer-provided equipment (computers, etc., called ”listed property” by the IRS) must be reported to the IRS as taxable income. The taxable value of this personal use is not IMRF earnings and is never reported to IMRF. Personal use of employer-provided vehicles is an exception to the rule (paragraph 5 above).
Cash awards, prizes, and bonuses constitute IMRF earnings and are reportable to IMRF.
Non-cash (in-kind) gifts to employees are not IMRF earnings and are not reportable to IMRF. Gift cards are considered to be gifts and are not reportable to IMRF.
Life insurance paid for by the employer is not IMRF earnings and not reportable to IMRF. This includes the taxable value of life insurance provided in excess of $50,000.
The value of health insurance is not IMRF earnings and is never reported to IMRF.
For cash payments made separately from salary and made in lieu of employer-provided health insurance or in association with or related to healthcare benefits, see Section 3.96 W. 5. Cash Payments Related to Health Insurance.
Employer contributions to Health Savings Accounts (established in connection with high deductible insurance) are not reportable.
For more information on employee contributions to Health Savings Accounts, see Section 3.96 W. 2. “High Deductible Health Savings Accounts (connected to high deductible insurance plans).”
Employer contributions to the following type of accounts are not reportable wages.
Post Employment Health Plan (PEHP)
Retirement Health Savings account (RHSA), unless the employer has a resolution for the wages to be reportable
Voluntary Employees' Beneficiary Association (VEBA)
Plan designed to fund future health costs or benefits under any section of the IRS code
Cash given to an employee under a wellness program is not reportable to IMRF. Incentives other than cash are not reportable.