Article Highlights:Health InsuranceRetirement PlansSpecial Rule for Military SpousesQualified Transportation Fringe BenefitsFlexible Spending Accounts (FSAs)Group Term Life InsuranceQualified Employee DiscountsEmployer-Provided Education AssistanceAdoption ExpensesChild and Dependent Care BenefitsHealth Savings AccountsSpecial Rule for Military SpousesTax law includes several tax- and financially favored benefits that employers can offer or provide to their employees. This article is intended to make you aware of these perks, with the caveat that all employers, especially small businesses, may not provide all, or perhaps any, of these covered perks. But whichever of these benefits your employer offers, you should seriously consider taking advantage of them, if you haven’t already.Health Insurance – For a company that has 50 or more employees, the Affordable Care Act requires the business to offer at least 95% of its full-time employees and their dependents (but not spouse) with affordable minimum essential health care coverage or be subject to a penalty. If you work for one of these larger employers and the company picks up the entire health insurance premium cost, consider yourself lucky, as the costs of health insurance coverage have risen dramatically over the last few years. More likely, you may have to pay part of the premium costs, and the plan may have a high deductible and/or co-pays. Even so, the tax-free benefit of what the employer covers is valuable. While not required to, businesses with fewer than 50 employees may offer health care coverage, often for competitive purposes in retaining employees. The health insurance premiums paid on your behalf by your employer are tax-free to you. If you aren’t aware of the value of this nontaxable employee benefit, you can look at your Form W-2, box 12a, code DD, which shows your share of the cost of employer-sponsored health coverage. You can claim the part of the coverage that you pay for with post-tax dollars as a medical expense, if you itemize your deductions.Retirement Plans – Although some larger employers may provide a company-funded retirement plan that will pay you a monthly benefit when you retire, most generally offer 401(k) plans with which an employee can save for retirement by making pre-tax contributions up to $22,500 for 2023, and if the employee is age 50 or over, they can qualify to make a catch-up contribution of up to $7,500, bringing the total to $30,000. Some employers also match their employees’ contributions up to a certain amount, which means an employee should endeavor to contribute at least the amount that the employer will match.Special Rule for Military Spouses – Starting in 2023, small employers (no more than 100 employees earning more than $5,000 per year) that have defined contribution plans may be eligible for new a tax creditthat can be up to $500 per eligible employee. The credit applies for their employees who are military spouses where the plan enables the military spouse to become eligible to participate in the plan within 2 months of being hired and meet other conditions. If you are a military spouse who hasn’t been able to contribute to an employer’s plan or receive matching contributions from the employer, you may be able to be covered by the employer’s plan much sooner than in the past.Qualified Transportation Fringe Benefits – Certain transportation-related fringe benefits that an employer may provide to employees are tax free to the employee. Prior to the passage of the tax reform in late 2017, employers were able to provide employees with tax-free reimbursement for parking, transit passes, commuter transportation, and bicycle commuting, subject to certain limits, and the employer could deduct the cost. The tax reform had a significant impact on these benefits. It eliminated the $20-per-month bicycle benefit and no longer allows the employer to deduct reimbursements made to employees for other transportation benefits, making some employers less likely to offer any transportation fringe benefits. However, they remain tax-free to the employee; for 2023, the limit on tax-free employer reimbursements is $300 per month each for qualified parking, transit passes, and commuter transportation.Flexible Spending Account (FSA) – This is a special account established by an employer that allows employees to contributeto the account throughsalary-reduction contributions. The benefit is that the contributions are pre-tax, meaning the employee doesn’t pay taxes on the money contributed to the account. This allows employees to payfor certain out-of-pocket health care costs with pre-tax dollars. The health careexpenses can be used forhealth plan deductibles, co-payments, and even some over-the-counter-medications. The annual limit on contributions is inflation adjusted and is $3,050 for 2023.However, if you don’t use the money in your FSA, you’ll lose it.