Joe Lazzarotti writes:
When an employer is responding to a breach of their employees’ personal information, one of the last things they may think about is whether the value of the credit monitoring or other identity protection services they make available to affected employees should be considered taxable to the employees and reported as such. In Announcement 2015-22, the Internal Revenue Service clarified that it will not consider the value of such services provided by the employer to employees to be gross income or wages to the employees. The IRS also stated it will not take the position that the employees should include the value of such services as gross income on their personal income tax returns.
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