Irs Section 125

Irs section 125 tax code.

Irs section 125. In 2007 the treasury department and the internal revenue service irs. Some of the. These plans allow employees to pay tax free premiums for group health insurance and other qualified benefits such as group term life accident long term care and dread disease coverage medical expenses and dependent care expenses.

A cafeteria plan is a separate written plan maintained by an employer for employees that meets the specific requirements of and regulations of section 125 of the internal revenue code. A section 125 plan is part of the irs code that enables and allows employees to take taxable benefits such as a cash salary and convert them into nontaxable benefits. It provides participants an opportunity to receive certain benefits on a pretax basis.

The plan is called a cafeteria plan because it includes a menu of benefits for employees to choose from. Section 125 of the internal revenue code refers to cafeteria plan benefits. These benefits may be.

Section 125 f defines a qualified benefit as any benefit which with the application of 125 a is not includable in the gross income of the employee by reason of an express provision of chapter i of the internal revenue code other than 106 b 117 127 or l32. If an employee makes the election before the start of the plan year and other 125 requirements are satisfied the employee s election of one or more qualified benefits does not result in gross income to the employee.