06/15/2026
Employers may provide, tax-free, de minimis fringe benefits to employees under Internal Revenue Code Section 132(e).
A de minimis benefit is any property or service provided to an employee that has so little value (taking into account how frequently you provide similar benefits to your employees) that accounting for it would be unreasonable or administratively impracticable.
1. In Chief Counsel Advice (CCA) Memorandum 200108042, which the IRS issued on December 20, 2000, the IRS said that non-monetary recognition awards having a fair market value of $100 do not qualify as de minimis fringes.
Cash, no matter how little, is never excludable as a de minimis benefit, except for occasional meal money or transportation fare. Reg. 1.132-6(c).
Unfortunately, there is no bright-line dollar amount as to what qualifies as de minimis. The tax code, Treasury regulations, and other IRS guidance do not provide a specific dollar limit for de minimis gifts.
A. Examples of non-taxable de minimis gifts include (as long as not routine):
1. Holiday and birthday gifts, other than cash, with a low FMV. IRC Section 102(c), however, provides that the gift exclusion does not apply to “any amount transferred by or for an employer to, or for the benefit of, an employee.”
2. Occasional personal use of a company copying machine and local phone calls,
3. Occasional parties, group meals or picnics for employees and their guests-still 100% deductible under TCJA (IRC Sec. 274(e)(4))
4. Employee, stockholder and director business meetings, also under IRC Sec 274(e)(5)
5. Occasional tickets for entertainment or sporting events, no longer deductible under TCJA
6. Flowers or fruit for special circumstances,
7. Meals, coffee, etc. provided to an employee in order to work overtime are no longer deductible as a result of 2025’s OBBBA.
8. Personal use of a cell phone provided by the employer primarily for business purposes,
9. Employer provided local transportation,
10. Commuting use of employer vehicle no more than once per month,
11. Meals provided to employees at an employer-operated eating facility under certain rules
12. Local transportation fare provided to any employee is a nontaxable de minimis fringe benefit if it is reasonable, occasional and is provided to permit the employee to work overtime. Reg.1.132-6(d)(2)
(Courtesy of Tax Speaker)
