According to FICA, what does the definition of wages include?

The correct choice highlights that the definition of wages under FICA (Federal Insurance Contributions Act) encompasses more than just cash payments. Specifically, the cash value of meals provided to employees for their convenience is considered part of their overall compensation, thereby qualifying as wages. This is significant since benefits or non-cash compensations can contribute to an employee's taxable income.

Under FICA regulations, wages can include various forms of compensation, emphasizing that taxable wages are not limited solely to cash or conventional forms of payment. This broader interpretation aligns with the intent of FICA to ensure all forms of employee compensation are subjected to Social Security and Medicare taxes, which help fund these vital social insurance programs.

Understanding the inclusion of non-cash benefits, such as meals, is essential for accurately determining an employee’s taxable income and ensuring compliance with tax regulations.