4.1. ERMUSR 05-12-2009 - Laserfiche WebLink

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• $115 per month for combined commuter highway vehicle transportation and transit passes. • X220 per month for qualified parking. Benefits more than the limit. If the value of a benefit for any month is more than its limit, include in the em- ployee's wages the amount over the limit minus any amount the emplayee paid for the benefit. You cannot exclude the excess from the employee's wages as a de minimis transportation benefit. More information. For more information on qualified transportation benefits, including van pools, and how to determine the value of parking, see Regulations section 1.132-9. Tuition Reduction An educational organization can exclude the value of a qualified tuition reduction it provides to an employee from the employee's wages. A tuition reduction for undergraduate education gener- ally qualifies for this exclusion if it is for the education of one of the following individuals. 1. A current employee. 2. A former employee who retired or left on disability. 3. A widow or widower of an individual who died while an employee. 4. A widow or widower of a former employee who re- tired or left on disability. 5. A dependent child or spouse of any individual listed in (1) through (4) above. A tuition reduction for graduate education qualifies for this exclusion only if it is for the education of a graduate student who performs teaching or research activities for the educational organization. For more information on this exclusion, see Publication 970, Tax Benefits for Education. Working Condition Benefits This exclusion applies to property and services you pro- vide to an employee so that the employee can perform his or her job. It applies to the extent the employee could deduct the cost of the property or services as a business expense or depreciation expense if he or she had paid for it. The employee must meet any substantiation require- ments that apply to the deduction. Examples of working condition benefits include an employee's use of a company car for business and job-related education provided to an employee. This exclusion also applies to a cash payment you provide for an employee's expenses for a specific or prear- ranged business activity for which a deduction is othe!vtirise allowable to the employee. You must require the employee to verify that the payment is actually used for those ex- penses and to return any unused part of the payment. Far information on deductible emp-oyee business ex- penses, see Unreimbursed Employee Expenses in Publi- cation 529. Miscellaneous Deductions. The exclusion does not apply to the following items. • A service or property provided under a flexible spending account in which you agree to provide the employee, over a time period, a certain level of un- specified noncash benefits with a predetermined cash value. • A physical examination program you provide, even if mandatory. • Any item to the extent the employee could deduct its cost as an expense for a trade or business other than your trade or business. Employee. For this exclusion, treat the following individu- als as employees. • A current employee. • A partner who performs services for a partnership. • A director of your company. • An independent contractor who performs services for you. Vehicle allocation rules. If you provide a car for an em- ployee's use, the amount you can exclude as a working condition benefit is the amount that would be allowable as a deductible business expense if the employee paid for its use. If the employee uses the car for both business and personal use, the value of the working condition benefit is the part determined to be for business use of the vehicle. See Business use of your car under Personal versus Business Expenses in chapter 1 of Publication 535. Also, see the special rules for certain demonstrator cars and qualified nonpersonal-use vehicles discussed below. However, instead of excluding the value of the working condition benefit, you can include the entire annual lease value of the car in the employee's wages. The employee can then claim any deductible business expense for the car as an itemized deduction on his or her personal income tax return. This option is available only if you use the lease value rule (discussed in section 3) to value the benefit. Demonstrator cars. Generally, all of the use of a demon- stratorcar by your full-time auto salesperson qualifies as a working condition benefit if the use is primarily to facilitate the services the salesperson provides for you and there are substantial restrictions on personal use. For more information and the definition of "full-time auto salesper- son," see Regulations section 1.132-5(0). For optional, simplified methods used to determine if full, partial, or no exclusion of income to the employee for personal use of a demonstrator car applies, see Revenue Procedure 2001-56. You can find Revenue Procedure 2001-56 on page 590 of Internal Revenue Bulletin 2001-51 at www.irs. gov/pub/irs-irbs/irb01-5 i.pdf. G}ualified nonpersonal-use vehicles. All of an em- ployee's use of a qualified nonpersonal-use vehicle is a working condition benefit. A qualified nonpersonal-use ve- hicle is any vehicle the employee is not likely to use more than minimally for personal purposes because of its de- sign. Qualified nonpersonal-use vehicles generally include all of the following vehicles. • Clearly marked police and fire vehicles. Page 18 Publication 15-B (2008)