Internal Revenue Code Section 125

For a complete understanding of the rules see the proposed regulations under code section 125.

Internal revenue code section 125. For provision that for purposes of section 125 of the internal revenue code of 1986 a plan shall not be treated as failing to be a cafeteria plan solely because under the plan a participant elected before january 1 1988 to receive reimbursement under the plan for dependent care assistance for periods after december 31 1987 and such. With the rules of internal revenue code code section 125 and related internal revenue service irs regulations. Under these rules a section 125 plan must have a written plan document and can only offer certain qualified benefits on a tax favored basis.

While self employed individuals may maintain a section 125 plan for their employees only. 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. Some of the.

For provision that for purposes of section 125 of the internal revenue code of 1986 a plan shall not be treated as failing to be a cafeteria plan solely because under the plan a participant elected before january 1 1988 to receive reimbursement under the plan for dependent care assistance for periods after december 31 1987 and such. The above discussion provides only the most basic rules governing a cafeteria plan. Section 125 of the internal revenue code refers to cafeteria plan benefits.