Question

The Perfection Tax Service gives employees $12.50 as "supper money" when they are required to work overtime, approximately 25 days each year. The supper money received:

a. Must be included in the employee's gross income.
b. Must be included in the employee's gross income if the employee does not spend it for supper.
c. May be excluded from the employee's gross income as a "noadditional-cost" fringe benefit.
d. May be excluded from the employee's gross income as a de minimis fringe benefit.
e. None of these.

Answer 1

The supper money received from Perfection Tax Service must be included in the employee's gross income as additional compensation for working overtime.

Step-by-step explanation:

The supper money received from Perfection Tax Service must be included in the employee's gross income. This is because supper money is considered as additional compensation for working overtime, and it is subject to income tax. Therefore, option a. Must be included in the employee's gross income, is the correct answer.