in the name of the law by Jonathan A. Ruybalid The Lodging Income-tax Exclusion
Camps and conference centers are often in a position to provide housing as part of its com- pensation to employees. This may be because of financial considerations, job requirement or location considerations. Te lodging has value to the employee. Te
basic rule of income tax is that if a worker is provided something of value in exchange for services, or as part of their relationship with the employer, that value is taxable income to the worker. Tis is true absent an exemption or an exclusion.
Internal Revenue Code Section 119 provides
one path for the exclusion of lodging from an employee’s income. It provides that the value of lodging may be excluded from an employee’s gross income if (1) the lodging is located on the employer’s business premises; (2) the lodging is furnished for the employer’s convenience and (3) the employee is required to accept the lodging as a condition of employment. This value is not subject to income tax with-
holding, or FICA or FUTA taxes, if the lodging is furnished under this exclusion. Thus, if excludable, the value of the lodging is not reported on Form W-2, and no taxes should be withheld or paid with respect to the value.
Lodging on employer business premises Camps and conference centers need to note that this must include in-kind lodging. A cash allowance for renting a house or apartment is not excludable from income.
Lodging furnished for employer’s convenience Te requirement that the employee must accept such lodging for the employer’s convenience means that the employee must accept the lodging to enable the employee properly to perform the duties of the job provided by the employer. For example, the value of the lodging is excludable if the lodging is provided because the employee is required to be available for duty (“on-call”) at all times or because the employee is required to respond to emergencies. Camp counselors have to live on-premises or in camper cabins to prop- erly perform the duties of the job.
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www.ccca.org
February/March 2020
Photos courtesy of Camp Lebanon
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