An employer does not need to include in its employee’s gross income a benefit provided to the employee if the employee could have claimed his or her own deduction had he or she paid for the benefit.

Specific Details

If a business paid for a job-related course that would have been deductible by the employee had the employee paid for it, the course is a working condition fringe benefit. Other examples of working condition fringe benefits include employer-provided vehicles and outplacement services.

Potential Savings

If you are in a combined (federal, self-employment, and state) tax bracket of 30%, you could reduce your taxes up to $300 for every $1,000 of income reduction by deducting working condition fringe benefits for your employees.