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Rick Martin
Rick Martin, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 34
Experience:  CPA
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I am the majority shareholder and CEO of a c-corp with full

Customer Question

I am the majority shareholder and CEO of a c-corp with full time and part time employees. I'd like to create an employee benefit/wellness plan that would be deductible as a business expense for the corp and would NOT count as income for the employees, but have it open only to FT employees (including me). Is this permissible?
Here are some of the items I'd like it to cover: dependent care, health and wellness (gym membership, CSA participation, reimbursement for co-pays, complementary medicine, etc), life insurance premiums for employee/spouses. Note that we do NOT offer health insurance (too small for Obamacare, all current employees are covered by spouse's insurance). Thanks in advance!
Submitted: 2 months ago.
Category: Tax
Expert:  Rick Martin replied 2 months ago.

Hi, I will develop an answer your question now. I'm a CPA with 25 years experience. Please give me a positive rating if you are happy with my service.

You may receive an offer from Just Answer for a phone call. If you feel a phone call is needed, please let me know and one will be arranged. Please give me a few moments to send my response

Expert:  Rick Martin replied 2 months ago.

The answer to your question is, yes and no. The tax rules are different for each item you listed. While all of them are potentially deductible as ordinary and necessary business expenses, the degree to which each item must be included in on employee W-2's varies. I will continue my response.

Expert:  Rick Martin replied 2 months ago.

For health and wellness, the value should be included in Box of the W-2.

Expert:  Rick Martin replied 2 months ago.

For dependent care, generally as long as the value is less than $5,000 it wouldn't be taxable. This is reported in Box 10 of the W-2.

Expert:  Rick Martin replied 2 months ago.

You can provide employees with up to $50,000 in group term life insurance as a tax-free employee benefit. If you provide more, the employee must pay tax on the value of the excess coverage. Code C reports this amount in Box 1.

Expert:  Rick Martin replied 2 months ago.

Many of my clients do provide certain perks that are fully deductible and tax-free to the employee. I will send you an invitation to a call if you would like to discuss this topic more over the phone.

Expert:  Rick Martin replied 2 months ago.

My button to offer a call does not appear to be working, please request a call from only me Rick Martin if you would like to further discuss ways to incentivize employees and boost morale in the most effective ways.

Expert:  Rick Martin replied 2 months ago.

Thank you for this opportunity to answer your question. Please give me a good rating if you are happy with my service. I strive to maintain my 5 star rating and will respond to any follow on questions you may have. -Rick