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23-622. Wages

A. "Wages" means all remuneration for services from whatever source, including commissions, bonuses and fringe benefits and the cash value of all remuneration in any medium other than cash. The reasonable cash value of remuneration in any medium other than cash shall be estimated and determined in accordance with rules prescribed by the department.

B. "Wages" shall not include:

1. For the purpose of sections 23-604, 23-726, 23-728 and 23-730.01, that part of the remuneration (other than remuneration referred to in succeeding paragraphs of this subsection) in excess of seven thousand dollars paid in 1983 or in a calendar year thereafter to an individual by an employer or his predecessor with respect to employment during the calendar year, unless that part of the above specified excess remuneration is subject to a tax, under federal law, against which credit may be taken for contributions required to be paid into a state unemployment fund by employers subject to the federal law. For the purposes of this paragraph, the remuneration paid to an individual by an employer with respect to employment in another state or states, upon which contributions were required of and paid by such employer under an unemployment compensation law of such other state or states, shall be included as part of remuneration equal to the above specified amounts.

2. The amount of any payment, including monies paid by an employer for insurance or annuities or into a fund to provide payments for insurance or annuities, made to or on behalf of an employee or any of his dependents under a plan or system established by an employer which makes provision for his employees generally, for his employees generally and their dependents, for a class of his employees or for a class of his employees and their dependents, on account of any of the following:

(a) Sickness or accident disability, except that in the case of payments made to an employee or any of his dependents, this subdivision excludes from wages only payments which are received under a workers' compensation law.

(b) Medical or hospitalization expenses in connection with sickness or accident disability.

(c) Death.

3. The payment by an employer, without deduction from the remuneration of the employee, of the tax imposed upon an employee under section 3101 of the internal revenue code relating to federal insurance contributions with respect to remuneration paid to an employee for domestic service in a private home or for agricultural labor.

4. Any payment on account of sickness or accident disability, or medical or hospitalization expenses in connection with sickness or accident disability, made by an employing unit to, or on behalf of, an employee after the expiration of six calendar months following the last calendar month in which the employee worked for such employing unit.

5. Any payment made to, or on behalf of, an employee or his beneficiary:

(a) From or to a trust described in section 401(a) of the internal revenue code relating to qualified pension, profit sharing and stock bonus plans which is exempt from tax under section 501(a) of the internal revenue code at the time of the payment unless the payment is made to an employee of the trust as remuneration for services rendered as an employee and not as a beneficiary of the trust.

(b) Under or to an annuity plan which, at the time of such payment, is a plan described in section 403(a) of the internal revenue code relating to taxability of beneficiaries under qualified annuity plans.

(c) Under a simplified employee pension as defined in section 408(k)(1) of the internal revenue code other than contributions described in section 408(k)(6) of the internal revenue code relating to employee salary reduction arrangements.

(d) Under or to an annuity contract described in section 403(b) of the internal revenue code relating to taxation of beneficiaries under annuities purchased by certain tax exempt organizations, other than a payment for the purchase of the contract which is made by reason of a salary reduction agreement whether evidenced by a written instrument or otherwise.

(e) Under or to an exempt governmental deferred compensation plan as defined in section 3121(v)(3) of the internal revenue code.

(f) To supplement pension benefits under a plan or trust described in this paragraph to take into account some portion or all of the increase in the cost of living since retirement as determined by the United States secretary of labor, but only if the supplemental payments are under a plan which is treated as a welfare plan under section 3(2)(b)(ii) of the employee retirement income security act of 1974.

(g) Under a cafeteria plan within the meaning of section 125 of the internal revenue code if such payment would not be treated as wages without regard to such plan and it is reasonable to believe that, if section 125 of the internal revenue code applied for purposes of this section, section 125 of the internal revenue code would not treat any wages as constructively received.

6. Remuneration paid in any medium other than cash to an employee for service not in the course of the employing unit's trade or business.

7. Remuneration paid for agricultural labor performed in any medium other than cash.

8. Any tip, gratuity or service charge received by an employee except:

(a) Before January 1, 1986, if either of the following applies:

(i) It is specified and collected by the employing unit.

(ii) It is used by the employing unit in order to conform to the minimum wage requirements of federal or state law.

(b) From and after December 31, 1985, if it is reported by the employee in writing to the employer on or before the tenth day of the month following the month in which it was received.

9. Remuneration which the individual receives for drill, training or other national guard or reserve activity which occurs on not more than one weekend per month or in lieu of a weekend drill or the equivalent.

10. Remuneration paid to or on behalf of an employee if and to the extent that at the time of the payment of the remuneration it is reasonable to believe that a corresponding deduction is allowable under section 217 of the internal revenue code relating to moving expenses determined without regard to section 274(n) of the internal revenue code relating to the disallowance of certain meal and entertainment expenses.

11. Any contribution, payment or service provided by an employer which may be excluded from the gross income of any employee, his spouse or his dependents under the provisions of section 120 of the internal revenue code relating to amounts received under qualified group legal services plans.

12. Any payment made or benefit furnished to or for the benefit of an employee if at the time of the payment or furnishing it is reasonable to believe that the employee will be able to exclude the payment or benefit from income under section 127, relating to educational assistance, or section 129, relating to dependent care assistance, of the internal revenue code.

13. The value of any meals or lodging furnished by or on behalf of the employer if at the time of the furnishing it is reasonable to believe that the employee will be able to exclude these items from income under section 119 of the internal revenue code.

14. Any payment made by an employer to a survivor or the estate of a former employee after the calendar year in which the employee died.

15. Any benefit provided to or on behalf of an employee if at the time the benefit is provided it is reasonable to believe that the employee will be able to exclude the benefit from income under section 74(c) relating to employee achievement awards, section 117 relating to qualified scholarships or section 132 relating to certain fringe benefits of the internal revenue code.

C. Subsection B, paragraphs 2 through 15 of this section do not exclude from wages any of the following:

1. An employer contribution under a qualified cash or deferred arrangement as defined in section 401(k) of the internal revenue code to the extent the contribution is not included in gross income pursuant to section 402(a)(8) of the internal revenue code relating to cash or deferred arrangements.

2. An amount treated as an employer contribution under section 414(h)(2) of the internal revenue code, relating to tax treatment of contributions by government units, if the employer picks up the contribution pursuant to a written or unwritten salary reduction agreement.

3. An amount deferred under any plan or other arrangement for deferral of compensation other than a plan described in subsection B, paragraph 5 of this section. An amount considered as wages pursuant to this paragraph shall be taxed only once and after being taxed shall not be considered wages for the purposes of this chapter.

D. In applying the provisions of subsection B of this section, any remuneration excluded from the definition of wages under 26 United States Code section 3306(b) shall not be wages.