To provide instructions for reporting the taxable value of State provided vehicles for 2001
Employees with employer provided vehicles
OSC will report the value of personal use of a State provided vehicle for the period November 1, 2000 through October 31, 2001, as income on 2001 W-2s. Therefore, the taxable amounts for 2001 should be reported as soon as possible, but no later than Payroll Period 18-Lag and Payroll Period 19-current for both Institution and Administration.
Determining the Value
The following rules are in effect for the reporting period:
- Annual Lease Value Method (ALV) - This method may only be used by employees who are allowed unrestricted use of a vehicle. It may not be used by employees who are prohibited from using a vehicle for personal use. The ALV of a car is determined as follows:
- Determine the fair market value of the car as of the first day on which it was made available to any employee of the employer for personal use.
- Find the ALV in the table found on page 5 of this bulletin for the appropriate fair market value of the car as determined in step (a) above.
- Fixed Rate Per Mile - This method may be used by all employees as an alternative to either the Annual Lease Value or Special Commuting Rule method. The Fixed Rate Per Mile Method may not be used for automobiles first made available for employees' personal use in 2001 if the fair market value exceeds $15,400.
- Special Commuting Rule - Commuting is valued at $1.50 each way ($3.00 per round trip) for each day the vehicle is used for commuting. This method may only be used by employees who are prohibited from using a vehicle for personal use. It may not be used by employees who have unrestricted use of a vehicle. Employees whose annual salary is equal to or greater than $117,600. are not permitted to use the Special Commuting Rule.
The rate per mile, if gasoline is not supplied or reimbursed, is 29 cents per mile. If gasoline is supplied or reimbursed by the employer, the rate is 34.5 cents per mile.
State Officers who have a vehicle for unrestricted use (as defined on Page 3 of Bulletin P-750 issued December 1, 1992) should be reminded of the following provisions of the rules:
- Officers who have the same vehicles as the had in 200 must use the same method to determine the taxable value as they used last year and must use that method for all future reporting periods. Officers who have the same vehicle since January 1, 1997 (4 full years) may recompute the annual lease value for this reporting period.
- Officers newly assigned a vehicle or who receive a replacement vehicle may choose either the Annual Lease Value method or the Fixed Rate Method for he new vehicle but then must use that method for all future periods during which they have that vehicle. Once the Annual Lease Value has been established it must be used for a four-year period or until the individual no longer has the vehicle.
- Officers are responsible for maintaining documentation to support the business use of the vehicle. The standard record keeping is "adequate records or sufficient evidence" to support any business use of their vehicle.
Examples of acceptable substantiation would be account books, diaries, log receipts, bills, trip sheets or expense forms. Written records made at or near the time the expense was incurred should be maintained to document the time, date, place, and purpose of business travel.
A form similar to the sample attached (AC 3173) to this Bulletin should be completed and signed by each employee covered by the regulations and retained by the agency.
The taxable value of personal use of an employer provided vehicle is subject to income and social security/medicare taxes and must be reported as income on the W-2. New York State will not withhold federal income taxes. However, state, local and social security/medicare taxes must be withheld. The amount is not considered salary for the purposes of computing retirement benefits.
Direct Input to PaySR
Agencies may enter the taxable value into PaySR on the Time Entry panel or report the transaction on the Miscellaneous Payment File. Agencies should enter this value for both active and inactive employees.
TIME ENTRY ON-LINE INSTRUCTIONS
- Access the Time Entry panel by Start - Compensate Employees - Maintain Payroll Data U.S. - Use - Time Entry - Add.
- Enter the following information in the Dialog Box to select the employee.
- Department - enter the employee's agency code
- EmplID - enter the employee's social security number
- Employment Rcd Nbr - enter the employee's record number if other than '0'
- Pay Period End Date - leave blank, defaults to the current pay period end date
- Click OK
- On the Time Entry panel enter the following information.
- Earnings Begin Date - use the beginning date of the current pay period
- Earnings End Date - use the ending date of the current pay period
- Earn Code - enter or select the earnings code FRB for Fringe Benefit
- Amount - enter the taxable value of the personal use of the vehicle
- Cmts - click on this button if you would like to add comments
- Type any comments relating to the taxable value of the personal use of the vehicle
- Click OK
- Click the Save button on the tool bar.
Agencies reporting this information on the Miscellaneous Payments File should use the same data elements as shown for the Time Entry On-Line Instructions.
For active employees, the taxable amount will be added to the bi-weekly gross prior to the calculation of social security/medicare tax and the tax will be computed on the full amount, unless the employee has paid the maximum tax. This amount will appear on the check and/or direct deposit stub and will be included in the YTD Gross.
While OSC cannot withhold taxes for inactive employees, OSC will include the taxable value on the employee's W-2.
Questions regarding time entry transactions should be directed to your agency's Payroll Auditor.
Questions regarding adjustments to employee W-2's and taxable value calculation may be directed to Payroll Deductions mailbox.