Disclaimer: Compt does not provide tax advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.
OSHA & Other Safety Requirements
Per OSHA guidelines, employers are required to pay for certain personal protective equipment (PPE). The below handout is a helpful guide. For that equipment that the employer will pay for, it is a tax deduction for the employer, and therefore, excluded from compensation from the employee.
It is not necessary that the equipment be required by the employer, it is excludable from wages if it helps the employee perform their job in a safer environment. And the expenses are substantiated under an accountable plan.
https://www.irsvideos.gov/Webinars/TaxableFringeBenefitsForEmployers
Non-taxable equipment & accessories:
- High-visibility hat
- Insulated gloves, work gloves
- Special sunglasses
- Tool Belts, Tool Boxes
- Hard hat
- Safety glasses
Work Clothes and Uniforms
Additional guidance was provided in this article, page 44, noting that certain work clothes can be excluded from income but must be required for work use, and cannot be adaptable to general use. It is not enough that the employee wear distinctive clothing; the employer must specifically require the clothing as a working condition.
These expenses would fall under the Working Condition Benefits I.R.C. Code § 132(a)(3), which also can be found in Publication 15(b). Unless the amount of the good was very minimal and therefore falls under the De Minimis (Minimal) Benefits guidance.
Non-taxable clothing:
- Official Police Officer Uniforms
- Fire gear & Clothing
- Breakaway safety vests
- Nursing scrubs/lab coats and stethoscope
- Specialized polo shirts with official badges that have uniform appearance
- Cafeteria aprons, hair nets, and coats
- Insulated coveralls
- Boots with protective toes (Black Leather Upper Insole and Arch Over Anti-Fatigue Mat Filler Internal - Cushioned Internal Met Guard Dual Density Slip-Resisting Protective toe / Safety toe: Steel, Composite, or Alloy)
Taxable clothing:
- Shoes worn by nursing staff, but can be worn outside of work environment
- Business suits, ties, belts and footwear
- Polos or Khakis that can be adaptable to everyday wear (even if it has a logo on it, it can still be considered adaptable to everyday wear)
- Athletic attire
- Insulated boots
As always, expenses must be reimbursed using an accountable plan guidance.
Reference: IRS Accountable Plan
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