Code Section 125

100 203 as added by pub.

Code section 125. Section 125 is part of the irs code that allows employees to convert a taxable cash benefit salary into non taxable benefits. These benefits may be. For provision that for purposes of section 125 of the internal revenue code of 1986 a plan shall not be treated as failing to be a cafeteria plan solely because under the plan a participant elected before january 1 1988 to receive reimbursement under the plan for dependent care assistance for periods after december 31 1987 and such assistance included reimbursement for expenses at a camp where the dependent stays overnight see section 10101 b 2 of pub.

A section 125 plan is part of the irs code that enables and allows employees to take taxable benefits such as a cash salary and convert them into nontaxable benefits. Section 125 f defines a qualified benefit as any benefit which with the application of 125 a is not includable in the gross income of the employee by reason of an express provision of chapter i of the internal revenue code other than 106 b 117 127 or l32. These plans allow employees to pay tax free premiums for group health insurance and other qualified benefits such as group term life accident long term care and dread disease coverage medical expenses and dependent care expenses.

125 h 2 b. Section 125 of the internal revenue code refers to cafeteria plan benefits. The plan is called a cafeteria plan because it includes a menu of benefits for employees to choose from.

125 h 2 a such individual was by reason of being a member of a reserve component as defined in section 101 of title 37 united states code ordered or called to active duty for a period in excess of 179 days or for an indefinite period and i r c. A plan does not fail to be a qualified benefits plan merely because it includes an fsa assuming that the fsa meets the requirements of section 125 and the regulations thereunder. Irs section 125 tax code irs section 125 code cafeteria plan documents are one of the most underused employee benefits for small businesses.

A section 125 plan provides employees with an opportunity to pay for certain benefits on a pre tax basis allowing them to increase their take home pay. A qualified benefits plan means an employee benefit plan governing the provision of one or more benefits that are qualified benefits under section 125 f. The section 125 program is a tremendous opportunity for you to enhance your benefits package.

Code section 125 allows employers to establish a type of tax savings arrangement called a section 125 plan or cafeteria plan for their employees.