Payroll News

IRS Sets 2019 Maximum Value for Employer-Provided Vehicles

May 9, 2019, 3:26 PM

The fair-market value amount that is used to qualify for cents-per-mile valuation of personal use of employer-provided vehicles increased to $50,400 for 2019, IRS said May 8.

Employers that provide employees with vehicles as a noncash fringe benefit are to include the taxable personal-use value in employees’ income, and one method is to use the cents-per-mile rule.

The 2019 maximum value also can be used for employers with fleets of cars through the fleet-averaging method, the IRS said in Notice 2019-34.

The amount, which applies to cars, vans, and trucks, was calculated under new procedures related to the federal tax code overhaul (Pub. L. 115-97) that took effect Jan. 1, 2018. Notice 2019-08, released Dec. 21, 2018, said a $50,000 base amount for valuing such vehicles was effective retroactive to 2018, and that the IRS was developing an amount for 2019.

Proposed rules that incorporate the guidance in the notice are expected to be issued by the IRS. The agency said it would amend the regulations to add $50,400 as the maximum value for use of the vehicle cents-per-mile and fleet-average valuation rules for 2019.

The new rules are expected to establish procedures for calculating inflation adjustments to the maximum value.

Comments on the latest guidance may be sent electronically, by mail, or hand-delivered to the agency by July 29, 2019, the latest notice said.

Notice 2019-34 is to be published May 28 in Internal Revenue Bulletin 2019-22.

To contact the reporter on this story: Michael Trimarchi in Washington at mtrimarchi@bloombergtax.com
To contact the editor on this story: Michael Baer at mbaer@bloombergtax.com

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