paying for employee's unexpected dental expenses

[kipkipple]

We have a Small LLC.  One owner and one employee.  we do not cary any health or dental insurance.  What are options for paying for employees unexpected dental expenses.  Some work has been done ~ $400 Additionally, Emploee needs crown/root canal  approx $2500.  Thanks in advance.

[john-pero]

You have at least 2 options here. The first option is you pay the medical bills for them as a loan or advance and you deduct repayment over time.

The second option is you pay it and include the payment in gross income as a taxable fringe benefit, subject to withholding and employer share. You would treat it like bonus since it has already been paid and gross up the net of 400. Keep in mind when a bonus payment is not included in regular pay the irs wants 22% withheld for FWT