Working Condition Fringe Benefit Plans

Key Takeaways

• Employees can save taxes on their work-related internet and cell phone expenses.
• Employers providing proper working condition fringe benefit plans to their employees can also improve employee retention and benefit from these tax savings.
• Complete a brief survey today and MainStreet will help you find ways to save money!

Cell Phone and Internet Savings Overview

Wouldn’t it be great if you could help your employees save money on monthly bills  like internet and cell phone expenses, just for doing their own jobs? By implementing a working condition fringe benefit plan, you can essentially pay these expenses as tax-free reimbursements.

These working condition fringe benefit plans are reimbursement programs implemented by the employer to reimburse employees for business expenses they incur to do their job, including internet and cell phone expenses. The plan outlines how a company will reimburse these telecommunication expenses and which expenses qualify for reimbursement. Under these plans, reimbursements are not treated as employee compensation and no employment taxes are required. Also, you, as an employer, can still deduct those reimbursements as business expenses to lower taxable income!

Here is how it works:

Wi-Fi Reimbursement Program

In order to qualify for reimbursement, the employees must be required to use their home wi-fi for work on a regular basis. The following expenses can be reimbursed:

• The cost of a basic internet plan with the internet service provider.
• The cost of higher-tiered plans, to the extent that they are necessary for employees to perform work.
  • Qualifying:
    An employee lives in an area with poor wi-fi generally but is required to take video meetings. The cost of a higher-tiered plan that enables the employee to participate in those meetings can be reimbursed. 
  • Not qualifying:
    A basic plan would be sufficient for an employee to perform work, but the employee upgrades the home wi-fi to play online video games. Only the cost of the basic plan can be reimbursed. 

Cell Phone Reimbursement Program

In order to qualify for reimbursement, employees must be required to use their cell phones for work on a regular basis. Examples of qualifying business use of the cell phone include:  

• Employees are required to be reachable at all times in case of a work-related emergency.
• Employees are required to be reachable outside normal working hours, in order to communicate with clients in different time zones.
• Employees are required to regularly communicate with clients over the phone or text message, and do not provide access to an alternative phone. 

If the employees use cell phones for qualifying business purposes as defined above, then the following expenses can be reimbursed:

• The cost of a basic cell phone plan with the cell service provider
  • If the employees are on a higher tier, they may submit expenses for the cost of the basic plan only.
• The cost of employees’ lines only, if they’re on family plans.
• Other regular costs associated with maintaining the cell phone plan, such as insurance and payments for the phone itself.

Based on each employee’s business use of above telecommunication expenses, the Company may set the amount each employee is eligible to expense, and will reimburse such expenses on the employees’ paychecks.

Work with MainStreet

MainStreet’s AI agent will negotiate with you and your employees to set up, manage, and monitor working condition fringe benefit plans that work for everyone. Our working condition fringe benefit plans are always cost-neutral or better – you can offer this great employee benefit at no additional cost! 

When implementing a working condition fringe benefit plan with MainStreet, you can count on:

• It will be easy and hassle-free for everyone.
  As your employees’ needs evolve, let MainStreet handle any necessary changes to your savings programs. You’ll always have visibility, but won’t have to worry about managing your employees’ savings. 
• You and your employees will receive the maximum possible benefits.
  MainStreet’s AI agent will ensure that the business and all its employees walk away with the most possible cash in your pockets. 
• Your savings are IRS-approved.
  We work within various sections of the tax code to offer you the greatest tax savings available. We provide all necessary documentation and substantiation to protect you in the unlikely event of an IRS audit. 

You only ever pay when you save, so your cash flow will only improve while offering your employees these meaningful benefits.  To get started or learn more,  please fill out this brief survey.