@PerryR wrote:
There are many, many employers who regularly expense lodging for their employees (traveling), potential employees (traveling, interviewing), vendors (selling), customers (buying), etc. For large corporations specifically, it is not uncommon to see lease/rent expense for apartments on the income statement (or balance sheet if the lease is capitalized). My experience is if these expenses were scrutinized in an audit, the issue comes down to Management's ability to persuade the Revenue Agent(s) the expense is "ordinary, necessary." This determination, of course, is on a case by case, facts, and circumstances basis. If it's determined not ordinary or necessary the outcome is for the employer to classify the sum as an "in-kind" benefit and added to W-2. I think the point is: Post TCJA it is best, if possible, for the employer to pay these expenses directly...
I will concede that I don't know enough about when the employer can deduct employee lodging as a business expense.
However, looking at publication 15-B, lodging on premises is only sometimes allowable as a non-taxable fringe benefit.
And if any employer could provide tax-free housing at any time, the atheists would not be suing to block the special treatment of clergy housing.
I find the following:
Employee housing benefits can be non-taxable to employees if all three of these conditions are met:
- The housing is provided on the property owned by the business or employer
- The housing is provided for the convenience of the employer. The employer must have a "substantial business reason" for this, such as a remote work location.
- The employee must accept housing as a condition of employment. A condition of employment is an agreement at the beginning of employment by both employer and employee.
Here, at 2 of the 3 conditions fail. The housing is not on premises, and the employee moved after being hired so accepting it wasn't a condition of employment.
As best I can determine, if the employer directly pays for lodging, the value must be included in the employee's taxable wages.
That being the case, it is equivalent as far as I can tell, for the employer to pay the landlord, or for the employer to pay the employee an extra cash stipend. The tax treatment is identical.
https://www.thebalancesmb.com/when-is-employee-housing-taxable-to-the-employee-4158182
https://www.mossadams.com/articles/2014/october/employer-provided-housing
