Valuing Employees’ Personal Use of Company Vehicles

Employers have a number of options on how to value the personal use of company vehicles. The IRS announced some relief for valuation for 2020 tax purposes. Those who had used the lease valuation method to figure the employee’s income from personal use of the vehicle, as well as employment taxes and W-2 reporting, can use the cents-per-mile valuation method for a company vehicle provided on or after March 13, 2020, as long as the vehicle’s fair market value didn’t exceed $50,400. Usually, a “consistency rule” would block the change, but this is part of COVID-19 relief. Employers can switch back to the lease valuation rule for 2021. #IdeaoftheDay