De Minimis Rule

The de minimis rule is an IRS guideline that determines whether certain employee benefits are excluded from taxable income due to their minimal value and infrequent occurrence, making it unreasonable or impractical to track them. Examples of de minimis benefits include employer-provided snacks, small holiday gifts, flowers, and occasional entertainment tickets. However, cash or cash equivalents (like gift cards) are generally not considered de minimis benefits, regardless of the amount, except for occasional meal money or transportation fare given to employees working unusual or extended overtime hours.

An example of the de minimis rule comes from U.S. tax law:

Example: De Minimis Fringe Benefit

An employer gives employees occasional snacks, coffee, or doughnuts in the break room. These are considered de minimis fringe benefits — too small in value and infrequent in nature to warrant taxation or detailed record-keeping.

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Why it's de minimis:

• The value is low
• It’s provided infrequently or as part of routine office hospitality
• It would be unreasonable or impractical to track and tax it