Basically, if you paid vehicle expenses for an employee or shareholder or officer for their personal vehicle, regardless of what that vehicle was used for, what you paid them needs to be included as taxable income on the employee's W-2 box 1, or officer's K-1.
Then the recipient of the W-2/K-1 will claim their job related vehicle expenses on their personal tax return, so as to offset the taxability of what the corporation paid them.
