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Paid Family Leave companies offer free meals and food as a benefit to employ- PASSION SNOWMAKING
One of the nice surprises in the new tax law is a short-term ees, the employees will not be taxed (as income) on the
experiment to incentivize businesses to offer paid fam- value of the meals provided by their company. For travel
ily and medical leave under the Family and Medical Leave purposes, the law does not change—businesses will still be
Act—without a heavy-handed government mandate to able to deduct 50 percent of food and beverage expenses
require all businesses to offer paid family leave. Simply put, and employee meals related to business travel.
it’s not a new employer mandate; it’s merely a tax credit for The good news? Office holiday parties are still fully
businesses voluntarily participating in paid family leave deductible under the new tax law. Cheers!
programs. For ski areas and businesses competing for labor
and employee retention, this change to the tax law will be Unreimbursed Employee Business Expenses
an important perk for employees, while providing a gener- Employees may no longer deduct expenses related to
ous tax write-off for businesses. employment that are not reimbursed by their employer,
The tax credit is only available in 2018 and 2019. To such as some uniforms, tools and supplies, professional
be eligible for the credit, employers must allow all qual- society dues, and cellphones used for work. This may
ifying full-time employees to take at least two weeks of impact the ability of ski area employees who used this
annual paid family and medical leave (and provide leave deduction for purchasing new skis, snowboards, boots,
for part-time employees on a pro rata basis). To qualify, bindings, helmets, and paid NSP or PSIA dues. While
workers must have been employed for at least one year, and the employees are losing this deduction because Congress
their income threshold must be below $72,000. The family effectively doubled the standard deduction (from roughly
leave does not include personal time off or vacation or sick $6,350 to $12,000 for a single filer), many employees
leave, and the employer’s program must pay at least 50 per- likely would not be itemizing on their taxes under the
cent of the employee’s wages during the new tax bill.
family leave. Employees who incur significant unre-
The resulting tax credit would offer 48% imbursed expenses may want to ask their Cut risks,
companies a tax credit of 25 percent of the Percentage of individual employer about establishing an “account-
employee’s earnings during their leave (if a tax filers who will pay able expense reimbursement plan” that
business only provides workers with half of nothing in federal would allow the employer to reimburse the
their regular earnings on paid family leave, income taxes under the employee (tax-free to the employee), while reap rewards
then the tax credit is only 12.5 percent). new tax law also entitling the employer a deduction
Because offering paid family and medical against business income.
leave is voluntary (at the federal level), this tax credit will be These so-called “accountable plans” are free from fed- with automated
most useful for companies with existing FMLA programs. It eral income and employment taxes for employees, and the
may be one more way to provide important retention perks reimbursements are not subject to the employer’s portion of
snowmaking!
and incentives for ski area employees if resorts offer such federal employment taxes. This may be another important
paid family and medical leave benefits. way for ski areas to improve recruitment and retention. snowmaking!
If more businesses adopt this tax credit, Congress
will likely reauthorize it after 2020 when this experi- Achievement Awards
ment expires. It seems odd that the federal tax code would incentivize
something as mundane as employee achievement and safety
Employer-Provided Meals awards—but it does. Still, maybe ski areas can capitalize on
Is this the end of free lunch? Prior to the new tax legisla- changes in the new tax law to reward and retain employees
tion, most ski areas offered some benefit or perk to employ- by providing awards of ski gear (boots, skis, boards, hel- A fully automated system means snowmaking crews are less likely
ees for resort-provided meals or discounts on food, and mets, goggles, etc.). For ski areas, the deductibility of these to encounter dangerous conditions, including high-pressure water and air.
the value of those meals or food was not treated as tax- employee achievement awards means that the federal gov-
able income to the employee. However, beginning in 2018, ernment effectively pays roughly a third of these award Automation improves the guest experience by keeping snowmobiles
a company will only be able to deduct 50 percent of the costs. This could be a way to blunt the elimination of the and manual equipment off the slopes.
expenses related to providing these meals and food ben- tax deduction that employees previously enjoyed for unre- Our automated snowmaking is the smart choice for employee safety,
efits to employees. And after 2026, companies will not imbursed expenses (i.e., to offset the costs of their skis, training and retention.
be able to deduct any of the expenses (zero deduction) of boots, goggles, PSIA or NSP dues, and so on).
offering on-site employee meals and cafeterias. However, if Under the new tax law, businesses can deduct employee
For further information on snowmaking systems, please visit
www.technoalpin.com
22 | NSAA JOURNAL | SPRING 2018