Taxation of Certain Benefits for Pennsylvania Personal Income Tax

Employee Welfare Benefit Program Benefits All welfare benefit program benefits are taxable in the year received to the extent they are attributable to contributions by the employer that were not includable in the income of the employee or were paid by the employer except: Amounts received for the permanent loss or loss of use of a part or function of the body or permanent disfigurement or in reimbursement of expenses incurred for medical care; Amounts which are computed with reference to the nature of a sickness or injury and without regard to the period the employee is absent from work; Amounts (other than regular wages or sick-leave pay) which are computed with record to the period that the employee is absent from work due to sickness or disability; Strike benefits; Supplemental Unemployment Compensation (SUB). For a payment to qualify as SUB pay, it must be made periodically during the period of actual unemployment and must continue only for the period of actual unemployment. Lump sum payments are taxable; Amounts paid to the beneficiaries or the estate of an employee by reason of the death of the employee; or The fair market value of employer-provided dependent care facilities.

Plan Requirements for Qualifying as an Eligible Pennsylvania Welfare and Benefit Plan Employers establish and maintain employee welfare benefit plans to provide miscellaneous benefits to eligible employees or their beneficiaries. Unless specifically excluded, Box 16 of federal Form W–2 includes the cost of the Pennsylvania-taxable benefits that your employer provides. Your employer must include the value of these benefits, regardless of the type of plan your employer has.