The Village must ensure that the tax laws are observed with respect to taxable fringe benefits, as defined by the Internal Revenue Code (IRC) and any other applicable federal and state statutes, provided to Village employees.
The Village of Romeoville provides several fringe benefits to employees. Some of the fringe benefits may be provided Village wide, others are provided to specific employees by their departments. Fringe benefits are considered a form of pay in addition to salary and wages paid to employees for the performance of services and must be taxed in a similar manner including, but not limited to, applicable Federal and State Income Tax, Social Security Tax and Medicare Tax.
Unless expressly excluded or deferred until a later year under the IRC, all taxable fringe benefits will be included in the employee's gross income in the year in which they are received and will be taxed in the manner prescribed by the IRC.
Taxable Fringe Benefits Include, but are not limited to:
Cash fringe benefits, such as, but not limited to, gift cards, gift certificates, vehicle allowance and apparel/clothing allowance are generally always taxable.
Uniforms and clothing provided by the Village to employees - Value of such apparel provided to the employee unless specifically excluded by the IRC. Departments will be required to provide the appropriate information to the Finance Department regarding the value of the clothing provided to the employee.
Village provided vehicle - Value of personal use of a Village-provided vehicle (including courtesy cars) unless specifically excluded by the IRC. The IRC has a complex set of rules regarding the taxation of employer provided vehicles. The employee will be required to sign a customized policy document that pertains to their circumstances, allowed uses of the vehicle and method of valuation for tax purposes.
Club membership and dues - Value of Village-paid club memberships and related expenditures to the extent that such activities are not documented to serve a bona-fide Village business purpose. The employee must pay dues and provide proper documentation of payment to the Finance Department. The employee will then be reimbursed for the membership fees or dues through payroll.
Meals/Meal Reimbursements - Value of meals or meal reimbursements provided by the Village to the employee unless specifically excluded by the IRC. Exclusions include meals reimbursed for legitimate business travel that includes an overnight stay, meals provided on premise for the Village's convenience and occasional group meals or picnics. Departments will be required to provide the appropriate information to the Finance Department regarding the value of the meals and/or meal reimbursements provided to the employee.
Nothing in this policy shall be construed to confer eligibility for benefits for which an employee is not otherwise eligible under federal/state law, policy, or practice. The Village reserves the right to amend this policy at any time without notice to conform to applicable laws and regulations.
(Ord. 23-1853, passed 5-3-23)