Taxable income includes any wages that you are taxed on - regular wages, overtime, bonuses, tips - and all the other type of pay you receive.
- Additionally, there are different ways taxation occurs. For your medicare and social security taxes (FICA), it includes all wages (? almost all wages) but for state and federal income tax the "pre tax" deductions are deducted.
Imputed income is also a taxable income. But it means "payment in kind" or pay you receive in something other than money.
In your situation:
The cost of the refreshment is added into your paycheck - this is probably called "taxable wages"
Then it is taxed for FICA taxes and if there is anything else that is calculated on total taxable income
Then later on the paycheck, the dollar value of the refreshment is removed from the net pay because you don't get paid in dollars, you get paid in food.
I don't see a situation where you would have a choice between imputed income and taxable income. You may have a choice between full taxable and pre-tax, but I don't know why you would choose anything other than pretax.
However, if the meal costs more than you would normally spend for lunch or you bring your lunch to work, it wouldn't make sense to receive the refreshment benefit.