+ Reply to Thread
Results 1 to 8 of 8
  1. #1
    allegiance98 is offline Junior Member
    Join Date
    Apr 2011
    Posts
    3

    Question about Corporate housing benefits

    My company is based in PA but is opening an office in CA and looking to re-locate me to CA. My question is this:
    If my company paid for my housing in CA for 6 months to make the transition easier and then after the 6 months I continued to live in the house but paid for the rent myself, would the initial 6 months of rent that the company paid out be added onto my taxable income, or would the company be able to claim it as a business expense?
    Would it be better for me tax wise to have the company sign the lease and pay rent directly and then have the rent deducted from my check after the 6 months? Or for me to sign the lease and expense the rent for the first 6 months?

    Any help would be appreciated as I am entering negotiations.

    Thanks
  2. #2
    pattytx is offline Senior Member
    Join Date
    Oct 2004
    Location
    small town, PA
    Posts
    9,442
    Are you going to relocate there permanently?
    ---------------------------------------------------------------------------------------------------------------------------------------------------------
    You have not won the law suit lottery; in fact, you haven't even won the law suit scratch-off.
  3. #3
    LdiJ is online now Senior Member
    Join Date
    May 2004
    Posts
    65,699
    Quote Originally Posted by allegiance98 View Post
    My company is based in PA but is opening an office in CA and looking to re-locate me to CA. My question is this:
    If my company paid for my housing in CA for 6 months to make the transition easier and then after the 6 months I continued to live in the house but paid for the rent myself, would the initial 6 months of rent that the company paid out be added onto my taxable income, or would the company be able to claim it as a business expense?
    Would it be better for me tax wise to have the company sign the lease and pay rent directly and then have the rent deducted from my check after the 6 months? Or for me to sign the lease and expense the rent for the first 6 months?

    Any help would be appreciated as I am entering negotiations.

    Thanks
    If this move is intended to be a permanent one, then the value of the rent is going to be taxable income to you. In that instance it would be cleaner if the company simply paid you extra money to cover the rent, and there would be no "expensing" of that rent...so it would be better if you signed the lease, and it should only be a six month lease.

    If this move is intended to be temporary, but might lead to a permanent position, but you still maintain a home in PA, where perhaps your family will still live, then perhaps it would be acceptable for the company to provide you housing as a non-taxable benefit. In that instance, it would be better if the employer signed the lease, and again, only a six month lease.

    Everything depends on the "intent" of the arrangement.
  4. #4
    allegiance98 is offline Junior Member
    Join Date
    Apr 2011
    Posts
    3
    The move would be temporary but long term, the plan is to relocate to CA for
    a maximum of 2 years. One motivation that I have for getting the company to sign the lease and make rent payments for the first 6 months is my credit is not the greatest and it would be difficult to be approved for a good home. additionally it seems like it would be easier on the company and me from a tax side because the company would have to give me additional income over that what the rent costs in order for me to pay the rent after taxes.

    Is there a time limit one can accept corporate housing before it goes onto their taxable income? Another consideration is that if the company pays me extra for the housing, or if it goes onto my taxable income, it will push me into the next tax bracket.



    Quote Originally Posted by LdiJ View Post
    If this move is intended to be a permanent one, then the value of the rent is going to be taxable income to you. In that instance it would be cleaner if the company simply paid you extra money to cover the rent, and there would be no "expensing" of that rent...so it would be better if you signed the lease, and it should only be a six month lease.

    If this move is intended to be temporary, but might lead to a permanent position, but you still maintain a home in PA, where perhaps your family will still live, then perhaps it would be acceptable for the company to provide you housing as a non-taxable benefit. In that instance, it would be better if the employer signed the lease, and again, only a six month lease.

    Everything depends on the "intent" of the arrangement.
  5. #5
    pattytx is offline Senior Member
    Join Date
    Oct 2004
    Location
    small town, PA
    Posts
    9,442
    http://www.irs.gov/pub/irs-pdf/p521.pdf
    ---------------------------------------------------------------------------------------------------------------------------------------------------------
    You have not won the law suit lottery; in fact, you haven't even won the law suit scratch-off.
  6. #6
    davew128 is offline Senior Member
    Join Date
    Nov 2007
    Posts
    4,930
    Quote Originally Posted by allegiance98 View Post
    Is there a time limit one can accept corporate housing before it goes onto their taxable income?
    In your specific instance, one day. Your relocation is long term, even if temporary and housing expenses paid for you are taxable.
  7. #7
    pattytx is offline Senior Member
    Join Date
    Oct 2004
    Location
    small town, PA
    Posts
    9,442
    Quote Originally Posted by davew128 View Post
    In your specific instance, one day. Your relocation is long term, even if temporary and housing expenses paid for you are taxable.
    That's the way I understand it as well. And, as a payroll manager, I've had several employees in this situation, and that's how our corporate tax department determined.
    ---------------------------------------------------------------------------------------------------------------------------------------------------------
    You have not won the law suit lottery; in fact, you haven't even won the law suit scratch-off.
  8. #8
    allegiance98 is offline Junior Member
    Join Date
    Apr 2011
    Posts
    3
    Quote Originally Posted by pattytx View Post
    That's the way I understand it as well. And, as a payroll manager, I've had several employees in this situation, and that's how our corporate tax department determined.
    Thanks for the info everyone, it looks like there is no way to keep this off of my taxable income.

Similar Threads

  1. Eviction from so called Corporate housing
    By Danielle1971 in forum Landlord / Tenant Issues
    Replies: 2
    Last Post: 05-16-2010, 10:07 PM
  2. Corporate Housing Reimbursement
    By Cynthia75 in forum Tax Law
    Replies: 2
    Last Post: 05-20-2009, 09:47 AM
  3. What benefits do you have for housing?
    By no0b in forum Social Security Disability / SSI Law
    Replies: 3
    Last Post: 05-26-2006, 12:52 PM
  4. In corporate housing - they towed my cars!!!
    By choinga in forum Landlord / Tenant Issues
    Replies: 12
    Last Post: 01-24-2005, 07:18 PM
  5. Corporate structure of housing cooperative
    By nathanw in forum Starting and Operating a Business
    Replies: 1
    Last Post: 10-11-2003, 07:18 PM

Tags for this Thread

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  

© 1995-2012 Advice Company, All Rights Reserved

FreeAdvice® has been providing millions of consumers with outstanding advice, free, since 1995. While not a substitute for personal advice from a licensed professional, it is available AS IS, subject to our Disclaimer and Terms & Conditions Of Use.