Puerto Rico & taxation of employee benefits

[alexa]

I am new to employee benefits taxation for residents of Puerto Rico-any light anyone can shed would be greatly appreciated.

Are benefits under 125 on a pre-tax basis also pre-tax for Puerto Rico residents?

Other benefits?

It is my high-level understaning Peurot Rican residents don't pay US federal income taxes

Therefore I am trying to understand the tax adaantages of offering a pre-tax flex plan

[Gary Lesser]

Section 125 - I am not sure about a Section 125 plan in Puerto Rico. On June 25, 2004, the Puerto Rico Senate approved House Bill 4746 without amendments. If signed into law by Governor Calderòn, the bill would pave the way for employers in Puerto Rico to establish flexible benefits programs, also known as cafeteria plans. I have no idea what the currect status of this legislation is.

HSA - Residents of Puerto Rico and American Samoa may establish HSAs only after statutory provisions similar to Code Sections 223 (relating to HSAs) and 106(d) (relating to employer-provided medical expense coverage) are enacted. [see, Notice 2004-50, Q&A 87, 2004-33 IRB 196]

[Mary C]

Currently Puerto Rico does not recognize Section 125.