Maternity Benefits Advanced by Employer to Employee Excluded from Gross Income

January 28, 1999 BIR RULING NO. 012-99 012-99 UCPB Securities, Inc. Suite 1612, 16/F, Ayala Tower I Exchange Plaza Ayala Avenue corner Paseo de Roxas Makati City Attention: Ms . Milagros A . Domingo Vice-President Gentlemen : This refers to your letter dated December 29, 1998 requesting in effect, for a ruling as to whether the SSS maternity benefits received by employees that are usually advanced by the employer to the employee are excluded from gross income and exempt from taxation. In reply, please be informed that Section 28 (b)(7)(E) of the National Internal Revenue Code of 1977 [now Section 32(B)(6)(e) of the Tax Code of 1997] excludes from gross income and exempts from taxation payments of benefits made under the Social Security Act of 1954, as amended. Maternity benefits are among those benefits provided under the Social Security Act of 1954, as amended by Republic Act 8282, more particularly Section 14-A of the said Act. Accordingly, the maternity benefits advanced by the employer to the employee are excluded from gross income, hence, exempt from withholding tax. Very truly yours, (SGD.) BEETHOVEN L. RUALO Commissioner of Internal Revenue