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Boise Idaho Business Guide: Fringe Benefits

Yes. An Idaho C-Corporation allows owner/shareholder-employees to receive the most amount of tax-free fringe benefits out of all business entities.

Idaho C-Corporations are allowed to offer their owner/shareholder-employees a plethora of fringe benefits. These benefits are considered business expenses and not taxable income. As long as the plan is nondiscriminatory, the reimbursements are not taxable to the employees.

When ready to form these types of fringe benefits, a nondiscriminatory plan will be spelled out in the Bylaws. If you are afraid of offering too much to your non-owner/shareholder-employees, then you can include a more difficult to obtain fringe benefit requirement.

No Two-Percent Rule

Idaho C-Corporations do no limit tax-free fringe benefits its owner/shareholder-employees for those who own more 2% like an Idaho S-Corporation. A C-Corporation receives full deductions for the cost of employees’ (including owner employees) health insurance, group term life insurance of up to $50,000 per employee, and even long-term care premiums without regard to aged based limitations.

If one has a small Idaho corporation and a lot of medical expenses that aren’t covered by insurance, the corporation can establish a plan that treats all expenses as tax deductible. Fringe benefits such as employer provided vehicles and public transportation passes are also deductible.

Common types of fringe benefits:

  • Health insurance premiums
  • Long-term-care and disability insurance premiums
  • Medical reimbursement plan
  • Education Assistance
  • Company-owned cars or other vehicles
  • Moving and Housing Benefits
  • Retirement plans
  • Memberships in fitness clubs
  • And many more….
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