CEO Compensation

Georgia

I live in Albuquerque, New Mexico and have received two different inquiries regarding whether or not the medical benefits for our CEO would be considered taxable income, if paid by our Board of Directors.
Does anyone have a definitive answer to this.
Georgia Tyler
[email]georgia@riograndecu.org[/email]

Cheryl S SPHR

I don't know the answer, but would suggest you consult with a tax advisor or CPA.

HRCalico

Welcome to the forum! I'm afraid I don't have an answer, either, but this question would go better in the wage and hour or employment law forums. They'll probably tell you to consult a professional, too, and I think that's your best bet. Good luck!

Kathy in Alabama

Yes - it is taxable compensation. Any health ins, life ins, use of company auto, even a non-cash benefit such as use of the company's lake house will be taxable and should be included in the W-2 that he/she receives at the end of the year. You may have to give a year end "bonus" to the CEO to be sure that there is enough income to cover the payroll taxes. At least that is how we handle it here. You can always ask payroll to show you the Circular E Tax Booklet that lists the definition of taxable wages if you'd like to have documetion for this. Kathy

marc

Definitely get the CPA's in on this one. There are structural considerations that can reduce or eliminate the tax consequences to the CEO.