Publication 15 B - Employer'S Tax Guide To Fringe Benefits

not others. The period of use need not be the same for

Include the value of the fringe benefit in box 1 of Form

each fringe benefit. However, if you use the rule for a

W-2. Also include it in boxes 3 and 5 if applicable. You may

particular fringe benefit, you must use it for all employees

show the total value of the fringe benefits provided in the

who receive that benefit.

calendar year or other period in box 14 of Form W-2). If you

If you use the special accounting rule, your employee

provided your employee with the use of a highway motor

also must use it for the same period as you use it. But your

vehicle and included 100% of its annual lease value in the

employee cannot use the special accounting rule unless

employee’s income, you must also report it separately in

you do.

box 14 or provide it in a separate statement. If there is not

You do not have to notify the IRS if you use the special

enough space on the Form W-2, you must report the value

accounting rule. You may also, for appropriate reasons,

to the employee on a separate schedule so that the em-

change the period for which you use the rule without

ployee can compute the value of any business use of the

notifying the IRS. But you must report the income and

vehicle.

deposit the withheld taxes as required for the changed

If you use the special accounting rule, you must notify

period.

the affected employees of the period in which you used it.

You must give the notice at or near the date you give the

Special rules for highway motor vehicles. If an em-

Form W-2 but not earlier than with the employee’s last

ployee uses the employer’s vehicle for personal purposes,

paycheck of the calendar year.

the value of that use must be determined by the employer

and included in the employee’s wages. The value of the

personal use must be based on fair market value or one of

How To Get Forms and

three special valuation rules:

•

Publications

The automobile lease valuation rule.

•

The vehicle cents-per-mile rule.

•

Personal computer. You can access the IRS Web Site

The commuting valuation rule (for commuting use

24 hours a day, 7 days a week at to:

only).

•

Download forms, instructions, and publications.

Election not to withhold income tax. You can choose

•

not to withhold income tax on the value of an employee’s

See answers to frequently asked tax questions.

personal use of a highway motor vehicle you provided. You

•

Search publications on-line by topic or keyword.

do not have to make this choice for all employees. You can

•

withhold income tax from the wages of some employees

Send us comments or request help by e-mail.

but not others. You must, however, withhold the applicable

•

social security and Medicare taxes on such benefits.

e-mail.

You can choose not to withhold income tax by:

You can also reach us using file transfer protocol at

1) Notifying the employee as described below that you

ftp.irs.gov.

choose not to withhold and

2) Including the value of the benefits in boxes 1, 3, 5,

CD-ROM. Order Pub. 1796, Federal Tax Products on

and 14 on a timely furnished Form W-2. For use of a

CD-ROM, and get:

separate statement in lieu of using box 14, see the

•

Instructions for Forms W-2 and W-3.

Current year forms, instructions, and publications.

•

The notice must be in writing and must be provided to

Prior year forms, instructions, and publications.

the employee by January 31 of the election year or within

•

Frequently requested tax forms that may be filled in

30 days after a vehicle is first provided to the employee,

electronically, printed out for submission, and saved

whichever is later. This notice must be provided in a man-

for recordkeeping.

ner reasonably expected to come to the attention of the

affected employee. For example, the notice may be mailed

•

The Internal Revenue Bulletin.

to the employee, included with a paycheck, or posted

where the employee could reasonably be expected to see

Buy the CD-ROM on the Internet at /

it. You can also change your election not to withhold at any

cdorders from the National Technical Information Service

time by notifying the employee in the same manner.

(NTIS) for $21 (no handling fee) or call 1-877-CDFORMS

(1-877-233-6767) toll free to buy the CD-ROM for $21

Amount to report on Forms 941 and W-2. The actual

(plus a $5 handling fee).

value of fringe benefits provided during a calendar year (or

other period as explained under Special accounting rule

By phone and in person. You can order forms and publi-

earlier) must be determined by January 31 of the following

cations 24 hours a day, 7 days a week, by calling

year. You must report the actual value on Forms 941 and

1-800-TAX-FORM (1-800-829-3676). You can also get

W-2. If you choose, you can use a separate Form W-2 for

fringe benefits and any other benefit information.

most forms and publications at your local IRS office.

Page 23

Publication 15 B - Employer'S Tax Guide To Fringe Benefits - 2002 Page 23

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