IRS adjusts maximum value of employer-provided vehicles for inflation

The Internal Revenue Service has issued a notice setting the inflation-adjusted maximum value of a vehicle provided by an employer to an employee for personal use at a maximum of $50,400 for tax purposes.

The IRS headquarters in Washington
The IRS headquarters in Washington.

Notice 2019-34 provides the inflation-adjusted maximum value of a vehicle — such as a car, van or truck — for 2019 for use with the fleet-average and vehicle cents-per-mile valuation rules. The notice also includes information about where the maximum value will be published in the future, and provides some extra flexibility for 2018 and 2019 in the consistency requirements under the existing regulations relating to use of the fleet-average and vehicle cents-per-mile rules.

Sections 1.61-21(d) and (e) of the Income Tax Regulations provide special valuation rules that employers can use when they’re determining the amount to include in employee income for personal use of employer-provided vehicles. However, the IRS pointed out that employers can only use the rules for vehicles with fair market values that don’t exceed a maximum value that’s adjusted for inflation every year under section 280F.

This year’s notice says the maximum value of an employer-provided vehicle (including cars, vans and trucks) first made available to employees for personal use in calendar year 2019 for which the vehicle cents-per-mile valuation rule provided under Treas. Reg. § 1.61-21(e) may be applicable is $50,400. In addition, the maximum value of an employer-provided automobile (including vans and trucks) first made available to employees for personal use in calendar year 2019 for which the fleet-average valuation rule provided under Treas. Reg. § 1.61-21(d)(5)(v) may be applicable is the same amount: $50,400.

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