Unless one has been living in a vacuum, it does not come as a surprise that identity theft is an ever-growing plague. Employers are certainly not immune to being unwitting targets. To this end, the IRS issued Announcement 2015-22 addressing the tax status of employer provided identity protection services. According to the Announcement, if identity protection services are provided to employees by their employer who has experienced a data breach, the amount of such protection services would not be included in the employees’ gross income or wages. However, if credit protection services are provided unrelated to a breach, or if cash is provided to employees to purchase their own identity protection services unrelated to a breach, then such amounts would be taxable.
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