§ 132. Certain fringe benefits
(a)
Exclusion from gross income
Gross income shall not include any fringe benefit which qualifies as a—
(b)
No-additional-cost service defined
For purposes of this section, the term “no-additional-cost service” means any service provided by an employer to an employee for use by such employee if—
(c)
Qualified employee discount defined
For purposes of this section—
(1)
Qualified employee discount
The term “qualified employee discount” means any employee discount with respect to qualified property or services to the extent such discount does not exceed—
(2)
Gross profit percentage
(A)
In general
The term “gross profit percentage” means the percent which—
(B)
Determination of gross profit percentage
Gross profit percentage shall be determined on the basis of—
(3)
Employee discount defined
The term “employee discount” means the amount by which—
(4)
Qualified property or services
The term “qualified property or services” means any property (other than real property and other than personal property of a kind held for investment) or services which are offered for sale to customers in the ordinary course of the line of business of the employer in which the employee is peforming [1] services.
(e)
De minimis fringe defined
For purposes of this section—
(1)
In general
The term “de minimis fringe” means any property or service the value of which is (after taking into account the frequency with which similar fringes are provided by the employer to the employer’s employees) so small as to make accounting for it unreasonable or administratively impracticable.
(2)
Treatment of certain eating facilities
The operation by an employer of any eating facility for employees shall be treated as a de minimis fringe if—
(B)
revenue derived from such facility normally equals or exceeds the direct operating costs of such facility.
The preceding sentence shall apply with respect to any highly compensated employee only if access to the facility is available on substantially the same terms to each member of a group of employees which is defined under a reasonable classification set up by the employer which does not discriminate in favor of highly compensated employees. For purposes of subparagraph (B), an employee entitled under section
119 to exclude the value of a meal provided at such facility shall be treated as having paid an amount for such meal equal to the direct operating costs of the facility attributable to such meal.
(f)
Qualified transportation fringe
(1)
In general
For purposes of this section, the term “qualified transportation fringe” means any of the following provided by an employer to an employee:
(2)
Limitation on exclusion
The amount of the fringe benefits which are provided by an employer to any employee and which may be excluded from gross income under subsection (a)(5) shall not exceed—
(A)
$100 per month in the case of the aggregate of the benefits described in subparagraphs (A) and (B) of paragraph (1),
In the case of any month beginning on or after the date of the enactment of this sentence and before January 1, 2012, subparagraph (A) shall be applied as if the dollar amount therein were the same as the dollar amount in effect for such month under subparagraph (B).
(3)
Cash reimbursements
For purposes of this subsection, the term “qualified transportation fringe” includes a cash reimbursement by an employer to an employee for a benefit described in paragraph (1). The preceding sentence shall apply to a cash reimbursement for any transit pass only if a voucher or similar item which may be exchanged only for a transit pass is not readily available for direct distribution by the employer to the employee.
(4)
No constructive receipt
No amount shall be included in the gross income of an employee solely because the employee may choose between any qualified transportation fringe (other than a qualified bicycle commuting reimbursement) and compensation which would otherwise be includible in gross income of such employee.
(5)
Definitions
For purposes of this subsection—
(A)
Transit pass
The term “transit pass” means any pass, token, farecard, voucher, or similar item entitling a person to transportation (or transportation at a reduced price) if such transportation is—
(B)
Commuter highway vehicle
The term “commuter highway vehicle” means any highway vehicle—
(C)
Qualified parking
The term “qualified parking” means parking provided to an employee on or near the business premises of the employer or on or near a location from which the employee commutes to work by transportation described in subparagraph (A), in a commuter highway vehicle, or by carpool. Such term shall not include any parking on or near property used by the employee for residential purposes.
(D)
Transportation provided by employer
Transportation referred to in paragraph (1)(A) shall be considered to be provided by an employer if such transportation is furnished in a commuter highway vehicle operated by or for the employer.
(F)
Definitions related to bicycle commuting reimbursement
(i)
Qualified bicycle commuting reimbursement
The term “qualified bicycle commuting reimbursement” means, with respect to any calendar year, any employer reimbursement during the 15-month period beginning with the first day of such calendar year for reasonable expenses incurred by the employee during such calendar year for the purchase of a bicycle and bicycle improvements, repair, and storage, if such bicycle is regularly used for travel between the employee’s residence and place of employment.
(ii)
Applicable annual limitation
The term “applicable annual limitation” means, with respect to any employee for any calendar year, the product of $20 multiplied by the number of qualified bicycle commuting months during such year.
(6)
Inflation adjustment
(A)
In general
In the case of any taxable year beginning in a calendar year after 1999, the dollar amounts contained in subparagraphs (A) and (B) of paragraph (2) shall be increased by an amount equal to—
(ii)
the cost-of-living adjustment determined under section
1
(f)(3) for the calendar year in which the taxable year begins, by substituting “calendar year 1998” for “calendar year 1992”.
In the case of any taxable year beginning in a calendar year after 2002, clause (ii) shall be applied by substituting “calendar year 2001” for “calendar year 1998” for purposes of adjusting the dollar amount contained in paragraph (2)(A).
(g)
Qualified moving expense reimbursement
For purposes of this section, the term “qualified moving expense reimbursement” means any amount received (directly or indirectly) by an individual from an employer as a payment for (or a reimbursement of) expenses which would be deductible as moving expenses under section
217 if directly paid or incurred by the individual. Such term shall not include any payment for (or reimbursement of) an expense actually deducted by the individual in a prior taxable year.
(h)
Certain individuals treated as employees for purposes of subsections (a)(1) and (2)
For purposes of paragraphs (1) and (2) of subsection (a)—
(1)
Retired and disabled employees and surviving spouse of employee treated as employee
With respect to a line of business of an employer, the term “employee” includes—
(i)
Reciprocal agreements
For purposes of paragraph (1) of subsection (a), any service provided by an employer to an employee of another employer shall be treated as provided by the employer of such employee if—
(j)
Special rules
(1)
Exclusions under subsection (a)(1) and (2) apply to highly compensated employees only if no discrimination
Paragraphs (1) and (2) of subsection (a) shall apply with respect to any fringe benefit described therein provided with respect to any highly compensated employee only if such fringe benefit is available on substantially the same terms to each member of a group of employees which is defined under a reasonable classification set up by the employer which does not discriminate in favor of highly compensated employees.
(2)
Special rule for leased sections of department stores
(A)
In general
For purposes of paragraph (2) of subsection (a), in the case of a leased section of a department store—
(B)
Leased section of department store
For purposes of subparagraph (A), a leased section of a department store is any part of a department store where over-the-counter sales of property are made under a lease or similar arrangement where it appears to the general public that individuals making such sales are employed by the person operating the department store.
(3)
Auto salesmen
(A)
In general
For purposes of subsection (a)(3), qualified automobile demonstration use shall be treated as a working condition fringe.
(B)
Qualified automobile demonstration use
For purposes of subparagraph (A), the term “qualified automobile demonstration use” means any use of an automobile by a full-time automobile salesman in the sales area in which the automobile dealer’s sales office is located if—
(4)
On-premises gyms and other athletic facilities
(A)
In general
Gross income shall not include the value of any on-premises athletic facility provided by an employer to his employees.
(5)
Special rule for affiliates of airlines
(A)
In general
If—
(i)
a qualified affiliate is a member of an affiliated group another member of which operates an airline, and
(ii)
employees of the qualified affiliate who are directly engaged in providing airline-related services are entitled to no-additional-cost service with respect to air transportation provided by such other member,
then, for purposes of applying paragraph (1) of subsection (a) to such no-additional-cost service provided to such employees, such qualified affiliate shall be treated as engaged in the same line of business as such other member.
(B)
Qualified affiliate
For purposes of this paragraph, the term “qualified affiliate” means any corporation which is predominantly engaged in airline-related services.
(7)
Air cargo
For purposes of subsection (b), the transportation of cargo by air and the transportation of passengers by air shall be treated as the same service.
(8)
Application of section to otherwise taxable educational or training benefits
Amounts paid or expenses incurred by the employer for education or training provided to the employee which are not excludable from gross income under section
127 shall be excluded from gross income under this section if (and only if) such amounts or expenses are a working condition fringe.
(k)
Customers not to include employees
For purposes of this section (other than subsection (c)(2)), the term “customers” shall only include customers who are not employees.
(l)
Section not to apply to fringe benefits expressly provided for elsewhere
This section (other than subsections (e) and (g)) shall not apply to any fringe benefits of a type the tax treatment of which is expressly provided for in any other section of this chapter.
(m)
Qualified retirement planning services
(1)
In general
For purposes of this section, the term “qualified retirement planning services” means any retirement planning advice or information provided to an employee and his spouse by an employer maintaining a qualified employer plan.
(2)
Nondiscrimination rule
Subsection (a)(7) shall apply in the case of highly compensated employees only if such services are available on substantially the same terms to each member of the group of employees normally provided education and information regarding the employer’s qualified employer plan.
(n)
Qualified military base realignment and closure fringe
For purposes of this section—
(1)
In general
The term “qualified military base realignment and closure fringe” means 1 or more payments under the authority of section 1013 of the Demonstration Cities and Metropolitan Development Act of 1966 (42 U.S.C. 3374) (as in effect on the date of the enactment of the American Recovery and Reinvestment Tax Act of 2009).
(o)
Regulations
The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section.
[1] So in original. Probably should be “performing”.