I just wrote a blog post that included this question – Are all tax-free benefits exempt from payroll taxes? Plus, I debunk some ideas about payroll. Tax-free benefits is one of the myths. Read the entire blog post, but here’s my answer to that myth.
- Qualified benefits offered under a cafeteria or Section 125 plan are exempt from FICA.
- Includes contributions made toward a medical, dental, vision and accident insurance plan and a flexible spending account, such as dependent care assistance and medical care reimbursements.
- Payments toward health savings accounts and group-term life insurance of $50,000 or less, plus qualified transportation expenses and disability insurance, are exempt from FICA.