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A Time to Remember that Employer-Provider Data Breach Benefits are not Taxable

| 1 min read
Former Partner
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Hardly a week goes by without another announcement of a high-profile data security breach.  The list of data breaches impacting high-profile employers and their employees just in 2017 is long.  Protecting our sensitive data is becoming a top priority for us all.  Recognizing this need, employer-provided identity theft protection is one of the fastest growing employer-provided benefits.  Willis Towers Watson found that, while around 35% of employers offered this benefit in 2015, as many as 80% of employers will offer the benefit by 2018.  The fact that employer-provided identity theft protection can be offered by employers as a nontaxable benefit adds to its attraction for employees.  Under IRS Announcement 2016-02, employees need not include the value of this benefit in income and employers are not required to report the value of the benefit on the employees’ Form W-2.  The nontaxable benefit includes identity theft insurance, identity restoration services, credit report and monitoring services and similar services.