Which of the following statements concerning cafeteria plans is true?
A)Allows employees to choose from a menu of fringe benefits or to choose cash.
B)Most of the menu choices are nontaxable fringe benefits.
C)Any cash elected is treated at taxable compensation.
D)All of these are true statements.See discussion in text.

Question

Quizplus · Accepted Answer

All of the statements are true. A cafeteria plan allows employees to choose from a menu of fringe benefits or to choose cash, most of which are nontaxable fringe benefits, and any cash elected is treated as taxable compensation.

Which of the Following Statements Concerning Cafeteria Plans Is True