Forks Employees Must pay Taxes to use Fitness Center

As a new perk for Forks Township employees, supervisors agreed to let them use the community center's fitness area for free this year.

Township resident Ed Reagan, however, questioned if that benefit was a conflict of interest.

"It's a use that's unethical," Reagan stated at a recent board meeting. "That's a conflict of interest. If you want to give it to employees for free, then you have to give it to residents too. We are paying our fair price. We don't want to subsidize them."

Township Solicitor Karl Kline said at Thursday night's though there's no conflict of interest, the use of the fitness facility does constitute income under federal guidelines.

That means Forks employees will have to pay taxes on the benefit.

Kline's argument was that municipal employers can offer their employees numerous benefits and perks that residents do not receive because it's an entitlement under their employment.

"There's no conflict of interest," Kline said. "There would be a conflict if the board voted for something in which they received financial benefit."

But Kline did agree with Reagan that the fitness facility use should be a "taxable benefit." The Internal Revenue Service does consider a free gym membership to be income.

The IRS allows 20 percent of the value to be free with the remaining 80 percent considered taxable income.

"Employees are required to pay federal income tax on 80 percent," Kline said.

Human Resources Director Barbara Bartek said that 80 percent of the $240 value amounts to $192. The tax on that amount would be $38 to $52.

Supervisors passed a motion to make the fitness facility perk optional for township employees rather than a benefit.