compensation question

[K2retire]

A plan uses W-2 compensation but excludes fringe benefits. The plan sponsor grosses up wages for the disability insurance premiums. Is that amount that is grossed up a fringe benefit?

[Mr Bagwell]

K2,

I'm curious what thoughts come about on this. Hopefully, some thoughts break lose soon.

[Belgarath]

FWIW - I would call this a fringe benefit. Unless it is through a cafeteria plan or something, then I believe the IRS would be consider it a taxable fringe benefit, but I haven't specifically reviewed whatever publication addresses fringe benefits.

https://www.irs.gov/publications/p15b/ar02.html

[K2retire]

I am inclined to call it a fringe benefit, although I didn't see anything on point in the IRS publication.

Our in-house attorney said he would call it wages, because it is cash pay included in the W-2 regardless of the intended use of the money.