You can define a variety of taxable and nontaxable benefits when establishing a Section 125 Cafeteria Plan for your organization using the Elements task. For the Pretax Deductions primary classification, the following secondary classifications are eligible for section 125 cafeteria plans. Dental 125 ...
A Cafeteria Plan, also known as a Section 125 plan (the IRS rule section), allows employees to pay for specific benefits on a pre-tax basis. Doing so means that employees have more take home pay, and employers pay less in matching payroll taxes - a true win-win for employees and emplo...
Section 125 Cafeteria A Cafeteria Plan, which includes Premium Only Plans and Flexible Spending Account Plans, is an employee benefits program designed to take advantage of Section 125 of the Internal Revenue Code. A Cafeteria Plan allows employees to pay certain qualified expenses—such as health ...
The Tax Reform Act of 1978 added Section 125 to the Internal Revenue Code. Any plan governed by this code section is properly called either a Section 125 plan or a cafeteria plan. It is usually best for single employer plans to avoid including a 401(k) plan as part of a cafeteria plan...
The catch is that these funds have to go for those expenses only, so you can't decide to skip out on that dental work and go on vacation instead. We wouldn't blame you if you did (who wants dental work, it's expensive and it hurts) but this is ruled under IRS Section 125. Anyt...
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Our Section 125 Cafeteria Plan Training &Certification Program is loaded with information on plan design, administrative options, and compliance requirements, and is written in non-legal terms - and is already used by thousands of companies and TPAs throughout the nation.What You'll Learn:By ...
elections regarding benefits under a cafeteria plan must be made prior to the first day of the plan year and then generally are irrevocable during that plan year. Midyear changes to such elections are permitted only under certain circumstances, such as a change in st...
suits their needs for a given period of time. For example, a young, healthy employee may have the ability to choose a lessexpensive, less comprehensive insurance plan than he/she might otherwise receive from anemployer. It is formally called a Section 125 plan. See also:Flexible Spending ...
Section 125 of the Internal Revenue Code (IRC) specifies that cafeteria plans are exempt from the calculation of gross income for federal income tax purposes. No federal orSocial Security taxesare deducted. However, some benefits, such as group life insurance benefits that exceed $50,000 or adop...