26 U.S.C. § 4977
§ 4977. Tax on certain fringe benefits provided by an employer
No plain-English explainer yet. Below is the official text. Explainers are being added section by section.
History
Added in 1984 by the Deficit Reduction Act of 1984. Last changed August 20, 1996 by the Small Business Job Protection Act of 1996.
Every change, newest first (4)
- August 20, 1996Small Business Job Protection Act of 1996
- August 10, 1993Omnibus Budget Reconciliation Act of 1993
- October 22, 1986Tax Reform Act of 1986
- July 18, 1984Deficit Reduction Act of 1984 · added this section
The law as written
Current through Public Law 119-102. Amendment notes omitted.
Structure
In the case of an employer to whom an election under this section applies for any calendar year, there is hereby imposed a tax for such calendar year equal to 30 percent of the excess fringe benefits.
For purposes of subsection (a), the term “excess fringe benefits” means, with respect to any calendar year—
the aggregate value of the fringe benefits provided by the employer during the calendar year which were not includible in gross income under paragraphs (1) and (2) of section 132(a), over
1 percent of the aggregate amount of compensation—
which was paid by the employer during such calendar year to employees, and
was includible in gross income for purposes of chapter 1.
If—
an election under this section is in effect with respect to an employer for any calendar year, and
at all times on or after January 1, 1984, and before the close of the calendar year involved, substantially all of the employees of the employer were entitled to employee discounts on goods or services provided by the employer in 1 line of business,
for purposes of paragraphs (1) and (2) of section 132(a) (but not for purposes of section 132(h)), all employees of any line of business of the employer which was in existence on January 1, 1984, shall be treated as employees of the line of business referred to in paragraph (2).
An election under this section shall apply to the calendar year for which made and all subsequent calendar years unless revoked by the employer.
All employees treated as employed by a single employer under subsection (b), (c), or (m) of section 414 shall be treated as employed by a single employer for purposes of this section.
Except as otherwise provided in regulations, this section shall apply only with respect to employment within the United States.