Small benefits given to employees that would be administratively impractical to tax are considered tax-free de minimis (minor) fringe benefits. Some examples are:
If your employer gives you a cell phone for substantial business reasons, the value of the cell phone is a tax-free working condition fringe benefit. In such a case, your personal use of the phone is tax free as a de minimis benefit.
The value of meals provided to employees on workdays at a subsidized eating facility is a tax-free de minimis fringe benefit if the facility is located on or near the business premises and the annual revenue from meal charges equals or exceeds the facility’s direct operating costs. Highly compensated employees or owners with special access to executive dining rooms may not exclude the value of their meals as a de minimis fringe benefit. However, the meals may be tax free if they must be taken on company premises for business reasons.
If employees are asked to work outside their normal working hours and due to unsafe conditions their employer provides transportation such as taxi fare, the first $1.50 per one-way commute is taxable but the excess over $1.50 is a tax-free de minimis benefit. This exclusion is not available to certain highly compensated employees and officers, corporate directors, or owners who own 1% or more of the company. These rules can apply to day-shift employees who work overtime as well as night-shift employees working regular hours.