Question

An employee can exclude from gross income the value of meals provided by his or her employer whenever:

a.There are no places to eat near the work location.

b.The meals are provided for the convenience of the employee.

c.The meal is not extravagant.

d.The meals are provided on the employer's premises for the employer's convenience.

e.None of these choices are correct.

Answer 1

The meals are provided on the employer's premises for the employer's convenience. (which is Option D)

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Explanation:

As per section 119 (a), the following condition is required to be satisfied in order for an employee to exclude the value of meals provided by his or her employer from his/her gross income:

The meals must be furnished by the employer. Such meals are furnished on the employer's business premises (employee's place of employment) for the convenience of the employer (that is for supporting a business purpose/objective like meals provided to employees working overtime on an occasional basis) and not for the convenience of the employee. Therefore, Option D is correct.