Fringe Benefit? Meals and Lodging?

[justanotheradmin]

Is the stipend compensation included in plan compensation?

401(k) plan - employees are paid regular hourly wages, plus a stipend for meals, lodging, etc. when traveling. The sponsor specializes in providing services to other areas so the stipend makes up a large portion of the company payroll. I believe these are also sometimes called per diem payments. (not to be confused with per diem employees). 

The plan document defines plan compensation as W-2 Wages without any exclusions (so fringe benefit is not marked as being specifically excluded). 

"Wages within the meaning of Code §3401(a) and all other payments of compensation to an Employee by the Employer (in the course of the Employer's trade or business) for which the Employer is required to furnish the Employee a written statements under Code §6041(d), 6051(a)(3), and 6052, determined without regard to any rules under Code §301(a) that limit the remuneration included in wages based on the nature of location of the employment or the services performed."

It's clear that the stipend in NOT a reimbursement, as it is based on the government rates, and not actual expenses. It's also clear that the stipend is not taxable income and doesn't appear on the W-2. But plenty of things don't appear on the W-2 (FSA elections for example) but are still included as comp. 

I don't have familiarity with this type of compensation. Thoughts? Other Benefit link threads that have covered this? 

[austin3515]

1) If it's not taxable it is not wages and not eligible.  So if the traveling salesman submits $7,000 of mileage based on the IRS approved rate under an "accountable plan" that does not mean that he has more eligible compensation (nor should it).  The individual is merely incurring legitimate business expenses on behalf of his employer.

2) You mentioned FSA.  Those are deductions that reduce taxable income and your document likely specifically says you should add it back (pre=tax deferrals under 125).

[justanotheradmin]

thank you austin3515. 

 

[austin3515]

Please, call  me Austin :)

[duckthing]

3515 is his MIDDLE name...

[austin3515]

Yeah, I had to give up "Danger" because people kept telling me it was a ridiculous middle name, so I switched it to 3515, much more normal!

[justanotheradmin]

lol! :-)