What is the meaning of a taxable benefit?


Quick Answer

A taxable benefit is any money or service received which has not been specifically exempted from income tax. This is basically the same for both U.S. and Canadian taxes, though the exempted items may be different.

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Full Answer

According to the IRS, if your employer provides you with a company car, any non-business use of that car is a taxable benefit, sometimes called a fringe benefit. The value of that use is added to your W-2 or 1099-MISC. Examples of other taxable benefits include gift or gas cards, gym memberships, prizes or awards and tuition reimbursements in excess of the amount allowed by the US Tax Code.

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