To provide instructions for reporting the taxable value of State provided vehicles for 2002.
Employees with employer provided vehicles.
Payroll Period 18-Lag and Payroll Period 19-current for both Institution and Administration.
OSC will report the value of personal use of a State provided vehicle for the period November 1, 2001 through October 31, 2002, as income on 2002 W-2s. Therefore, the taxable amounts for 2002 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)
Employees who have unrestricted use of a vehicle should use this method. Employees who are prohibited from using a vehicle for personal use cannot use this method. 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 Method
Employees can use this method as an alternative to either the Annual Lease Value or Special Commuting Rule method. The Fixed Rate Per Mile Method cannot be used for automobiles first made available for employees' personal use in 2002 if the fair market value exceeds $15,300.
The rate per mile, if gasoline is not supplied or reimbursed, is 31 cents per mile. If gasoline is supplied or reimbursed by the employer, the rate is 36.5 cents per mile.
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. Employees who are prohibited from using a vehicle for personal use must use this method. Employees who have unrestricted use of a vehicle must not use it. Employees whose annual salary is equal to or greater than $121,600 are not permitted to use the Special Commuting Rule.
State Officers 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 vehicle as they had in 2001 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, 1998 (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 the 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 for record keeping is "adequate records or sufficient evidence" to support any business use of their vehicle.
Examples of acceptable substantiation are: account books, diaries, log receipts, bills, trip sheets or expense forms. Written records made at or near 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.
Agencies may enter the taxable value into the Payroll System 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 INSTRUCTIONS
- Access the Time Entry panel by Go - 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
- EmpllD - 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 to add comments relating to the taxable value of the personal use of the vehicle
- Click OK
- Click the Save button on the tool bar
Miscellaneous Payments File
Agencies reporting this information on the Miscellaneous Payments File should use the same data elements as shown for the Time Entry On-Line Instructions.
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.
While OSC cannot withhold taxes for inactive employees, OSC will include the taxable value on the employee's W-2. The amount is not considered salary for the purposes of computing retirement benefits.
The amount will appear on the check and/or direct deposit stub and will be included in the YTD Gross.
Questions regarding time entry transactions should be directed to your agency's Payroll Auditor.
Questions regarding adjustments to employee W-2's may be be directed to the Payroll Deductions mailbox.
Questions regarding the taxable value calculation may be be directed to the Payroll Deductions mailbox.