The IRS recently published the 2018 version of Publication 15-B, Employer's Tax Guide to Fringe Benefits. Publication 15-B contains information for employers on the tax treatment of certain fringe benefits, including accident and health coverage, employer assistance for adoption, dependent care and educational expenses, discount programs, group term life insurance, HSAs, FSAs and transportation benefits.
The 2018 version is similar to the 2017 version but includes the 2018 dollar amounts for various benefit limits and definitions, including the maximum out-of-pocket expenses for HSA-qualifying HDHPs, maximum contribution amounts for HSAs and the monthly limits under qualified transportation plans.
Specifically, for plan years beginning in 2018, salary reduction contributions to a health FSA are limited to $2,650 (it was $2,600 for plan years beginning in 2017). In addition, for 2018, the monthly exclusion for qualified parking is $260 and the monthly exclusion for commuter highway vehicle transportation and transit passes is $260. Finally, the publication states that the business mileage rate for 2018 is 54.5 cents per mile (it was 53.5 cents per mile in 2017).
It has also been updated to include legislative changes. For example, employees cannot contribute to biking-related expenses on a pretax basis anymore under an employer-sponsored transportation program. To clarify, the Tax Cuts and Jobs Act (2017 tax reform) suspends the exclusion from gross income and wages for qualified bicycle commuting reimbursements for taxable years beginning after Dec. 31, 2017. Additionally, 2017 tax reform repealed the exclusion from gross income and wages for employment tax purposes of qualified moving expense reimbursements, except in the case of a member of the U.S. Armed Forces on active duty who moves because of a permanent change of station.
Publication 15-B is a useful resource for employers on the tax treatment of fringe benefits. Employers should familiarize themselves with the publication, as well as other IRS notices and publications referenced in Publication 15-B, which further describe and define certain aspects of those benefits.
2018 Publication 15-B, Employer's Tax Guide to Fringe Benefits »