Laserfiche WebLink
QUICK REFERENCE GUIDE FOR PUBLIC EMPLOYERS <br />value of the benefit must be included in wages, but withholding of income tax on the value of <br />vehicle use is at the employer's option. Social security and Medicare withholding is required. <br />All of your employee's use of a qualified nonpersonal use vehicle qualifies as a working <br />condition fringe. You can exclude the value of that use from employee income. A qualified <br />nonpersonal use vehicle is any vehicle the employee is not likely to use more than minimally <br />for personal purposes because of its design. Qualified nonpersonal use vehicles include: <br />• Clearly marked police, fire, and public safety officer vehicles. The employee must be <br />on -call, required to commute in the vehicle, and be prohibited from personal travel <br />outside the jurisdiction. <br />• Unmarked vehicles used by law enforcement officers. The officer must be authorized to <br />carry a firearm, execute search warrants and make arrests. <br />• An ambulance or hearse used for its specific purpose. <br />• Any vehicle designed to carry cargo with a loaded gross vehicle weight over 14,000 <br />pounds. <br />• Delivery trucks with seating for the driver only, or driver plus a folding jump seat. <br />• A passenger bus with a capacity of at least 20 passengers used for its specific <br />purpose. <br />• School buses. <br />• Tractors and other special purpose farm vehicles. <br />All Other Employer -Provided Vehicles <br />If you provide an employee with a vehicle that does meet the qualified nonpersonal use <br />criteria, the personal use of the vehicle is a taxable fringe benefit. It is the employer's <br />responsibility to determine the actual value of this fringe benefit and to include the taxable <br />portion in the employee's income. <br />Example: A town -owned pickup truck is marked with the town name. It is not a police, fire, or <br />public safety vehicle, or other qualified nonpersonal use vehicle. The employee is usually <br />allowed to take the vehicle home because he is "on call." The vehicle is not a qualified <br />nonpersonal use vehicle, thus the commuting is a non -cash taxable fringe benefit. <br />Special Valuation Rules <br />There are three methods to determine the value of the vehicle provided to the employee: <br />1) Lease value rule <br />2) Cents -per -mile rule <br />3) Commuting valuation rule <br />1) Lease Value Rule <br />10 <br />