Are benefits provided by a third party considered taxable?

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Are benefits provided by a third party considered taxable?

For example, if my employer uses a platform to process my payments and the platform allows me to convert my net income into higher-valued gift cards, would the added value of the gift card be considered taxable? So for a specific example, I decide to convert my $50 payment into a $60 gift card instead. Is the $10 taxable?

Asked on July 10, 2015 under Employment Labor Law, New York

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

Any compensation you receive for your employment is taxable, unless specifically excluded (e.g. the use of pre-tax dollars for health care), and it does not matter whom provides that compensation--your employer directly, or through a 3rd-party vendor or administrator. So yes, the additional value should be taxable as income.


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