QUESTION: How do I determine the amount that should be reported as taxable wages on an employee’s W-2 for personal use of a company car (PUCC)?
When an employee uses a company provided vehicle for personal use it is considered a fringe benefit and must be treated as taxable wages, for example an employee who drives the vehicle to/from work each day. The fair market value of the fringe benefit must be reported as taxable wages, and can be determined by using one of three methods – Cents-Per-Mile Rule, Commuting Rule, or Lease Value Rule (https://www.irs.gov/publications/p15b#en_US_2017_publink1000193771). Companies will need to evaluate the circumstances surrounding the employee and the vehicle being used to determine which rule is most appropriate. Keep in mind, that if the vehicle was previously assigned to another employee there may be a limit on the rule that can be used going forward. To learn more about this and other fringe benefits, sign up for our upcoming webinar on November 15th.
To learn more about this and other types of items may need to be reported on your employees W2s as taxable income, join Stambaugh Ness and Kristi Weierbach from the convenience of your desk for Fringe Benefits on November 15th.
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