Taxable vacation award--how to deduct 401k?

From the client:

We recently awarded a trip to Jamaica  through a raffle drawing for employees that elected to make contributions to AFSAPAC.  This trip is taxable to the employee.  We currently have a TFB (fringe benefits code) that we use for car allowances through payroll.  This code taxes them on the income but does not pay them a net amount in their paycheck.  For the annual 401k audit, we exclude this TFB amount from their gross income.  Can we use this code for the trip as well? 

Document specifically excludes "taxable fringe Benefit for car allowance" from compensation and that's it.

So, to me, that means this "income" is subject to 401(k) deduction.  But how do they deduct for it?

Yikes. Maybe withhold extra from cash wages between now and year-end, or some other logical time frame? 

If document said TFB excluded and w/o the additional car allowance detail there'd be no issue, but agree this probably has to be included. Are there other TFB that are included? Otherwise, why would they get that specific on the exclusion? 

I think I would make a special deferral election form and just have the participant elect to not have deferrals come out of that special income.  

On 4/14/2022 at 10:22 AM, BG5150 said:

Document specifically excludes "taxable fringe Benefit for car allowance" from compensation and that's it.

Documents also usually exclude from deferrals non-payable income items such as tips that are collected in cash directly by the employee.  I would get away from compensation and dig deeper into the deferral sections.

Nate, you da man!  It was there in the deferral section.

Thanks!