Practitioners’ questions are answered by a payroll and tax consultant who also is an enrolled agent licensed to practice before the Internal Revenue Service.
Question: An employee is assigned to work on-site at one of our projects. The assignment is expected to last for two years. Our company is paying the rent for the employee’s accommodations at the location. Is the employer-paid rent taxable income to the employee?
Answer: Generally, the provision of housing to an employee by an employer is taxable income to the employee. However, there are exceptions.
An exception is that the provision of housing is a...