News / Article
Guidance permits change in vehicle use valuation during pandemic
Source: journalofaccountancy.com - Jan 7, 2021
In response to the COVID-19 pandemic, the IRS is allowing employers to switch from the vehicle lease valuation method to the cents-per-mile method (57.5 cents for 2020, 56 cents for 2021) for determining the value of an employee’s personal use of a vehicle during the pandemic (Notice 2021-7). Because many businesses have either closed or switched to telecommuting, employers have noticed that using the Regs. Sec. 1.61-21(d) automobile lease valuation rule has resulted in an increase in the lease value required to be included in an employee’s income for personal use of a vehicle in 2020 compared with earlier years. In contrast, the cents-per-mile method produces a more accurate income inclusion.
Category: General Business