Employer Reimbursed Employee for Use of Travel Trailer

[Sis-Q]

My husband is a W2 employee that was on a 4 month temporary assignment to a work site away from his tax home. He was required to live at the work site. The company rented travel trailers for the site for housing. Because he had his own trailer available to bring to live in, the company reimbursed him for the use of it, rather than bring in a rental. This was not in his W2. Is this reimbursement taxable?

[JillS56]

Not necessarily.  If the reimbursement of expenses is part of an accountable plan, then the reimbursed expenses are not taxable.  On the other hand, if the employer did not have an accountable plan, then the reimbursement, even those that are ordinary and necessary, are taxable income.

My guess is if the employer did not include the reimbursed expenses in his W-2, the employer must have an accountable plan.

[Sis-Q]

Thank you. We really have no idea if they have an official plan...I guess if it isn't in the W2 we should assume they do!

[ThomasM125]

If the employer had an accountability plan, they would require you to complete documentation supporting your use of the money they advanced to you, such as requiring you to submit a receipt for the cost of the rental.

Also, in effect you rented the trailer to the company since you got paid for the use of it. 

So, it sounds like it is either rental income or reimbursed employee business expenses that weren't a part  of an accountability plan. In either case, it would be taxable, even though not reported to you as such. If you reported it as rental income, you could deduct expenses such as gas and maintenance on it up to the amount of money they paid you.

[Sis-Q]

We did submit documentation of use of the personal trailer to the company, so possibly they have one, but it is a small company that does a lot of handshake deals so who knows. Sounds like we are in the trailer rental business regardless from what you said though. I guess I will try to figure out where to input that income.

[Vanessa A]

Keep copies of the documentation you submitted, your documentation is more important for your return than his employers documentation. Rent received would be reported on Schedule E.

To enter your rent received and expenses on Schedule E click the following:

• Federal
• Income and Expenses
• Show more next to Rentals, Royalties and Farm
• Start next to Farm Income and Farm Rental

[azsunshine]

This sounds like the company treated this as per diem for working out of town/ travel under an accountable plan.  An accountable plan doesn't have to have itemized receipts if under federal per diem daily rate  but does have to have date,  place,  business purpose.  Some companies use time sheets of the employee to substantiate.