3.96 F. Non-Cash Earnings (Wages-In-Kind)

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.

Meals

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.”

Lodging

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 also considered earnings.

Tax treatment of lodging is explained in IRS Publication 15-B, ”Employer’s Tax Guide to Fringe Benefits.”

Uniforms and Clothing Allowances

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

Tuition payments are excluded from IMRF earnings.

Automobile Use

Automobile allowances paid to compensate for the business use of a personal car 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 3.96FF. Expense Allowances under an accountable plan are never reportable.

The value of the personal use of an automobile 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 two 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.

Personal Use of Listed Property - 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 not reported to IMRF unless the employer acts to allow taxable expense allowances as IMRF earnings (see 3.96FF). Personal use of employer-provided automobiles is an exception to the rule (paragraph a. above).

The method of valuing automobile use is explained in IRS Publication 15-B, ”Employer’s Tax Guide to Fringe Benefits.”
6. Personal Use of Listed Property