va. sheriffs’ association annual conference by wendy speelman
DESCRIPTION
VA. Sheriffs’ Association Annual Conference By Wendy Speelman Federal, State & Local Government Specialist 9/16/14. Uniform Requirements. For uniforms to be nontaxable and not be included in the employee’s wages they must: Be required by employer to be worn - PowerPoint PPT PresentationTRANSCRIPT
![Page 1: VA. Sheriffs’ Association Annual Conference By Wendy Speelman](https://reader035.vdocuments.us/reader035/viewer/2022070403/568139cc550346895da17a21/html5/thumbnails/1.jpg)
VA. Sheriffs’ Association Annual Conference
By Wendy SpeelmanFederal, State & Local Government Specialist 9/16/14
![Page 2: VA. Sheriffs’ Association Annual Conference By Wendy Speelman](https://reader035.vdocuments.us/reader035/viewer/2022070403/568139cc550346895da17a21/html5/thumbnails/2.jpg)
2
Uniform Requirements
For uniforms to be nontaxable and not be
included in the employee’s wages they must:
•Be required by employer to be worn
• Must be in written policy
• Can’t be optional if they wear them
•Not be adaptable to every day street wear
![Page 3: VA. Sheriffs’ Association Annual Conference By Wendy Speelman](https://reader035.vdocuments.us/reader035/viewer/2022070403/568139cc550346895da17a21/html5/thumbnails/3.jpg)
3
How Clothing is Purchased
• Uniform rules applies to:
• If the employer purchases the clothing
• If the employee purchases and the
employer reimburses the employee
• If purchased thru a rental company
![Page 4: VA. Sheriffs’ Association Annual Conference By Wendy Speelman](https://reader035.vdocuments.us/reader035/viewer/2022070403/568139cc550346895da17a21/html5/thumbnails/4.jpg)
4
Accountable Plan
• Allowances paid through non- accountable
plan are Taxable
• If give employee $200 for uniform and they
don’t provide substation (receipts) then
must include in W-2
• Business Connection
• Return excess in reasonable time
![Page 5: VA. Sheriffs’ Association Annual Conference By Wendy Speelman](https://reader035.vdocuments.us/reader035/viewer/2022070403/568139cc550346895da17a21/html5/thumbnails/5.jpg)
5
Law & Court Cases
• If clothing suitable for taking the place of
regular clothing, include in W-2
• IRC 162 & 262
• Mella v. Commissioner T.C. Memo 1968-594
• Not enough that the employee does not
wear the clothing away from work
• Pevsner v. Commissioner 628 F.2d 467
![Page 6: VA. Sheriffs’ Association Annual Conference By Wendy Speelman](https://reader035.vdocuments.us/reader035/viewer/2022070403/568139cc550346895da17a21/html5/thumbnails/6.jpg)
6
Examples of Non Uniforms
•Ball Caps
•T-shirts
•Socks
•All shoes unless
steel toe (safety)
•Tactical/BDU pants
•Polo Shirts
•Plain belts
•Shorts
•Under Armour
•Gloves - patrolman
•Sweatshirt
•Carhart jacket
•Jeans
![Page 7: VA. Sheriffs’ Association Annual Conference By Wendy Speelman](https://reader035.vdocuments.us/reader035/viewer/2022070403/568139cc550346895da17a21/html5/thumbnails/7.jpg)
Employer-Provided Vehicles
• Personal Use is taxable & included in
wages
• Includes commuting
• Business Use is not taxable
• No record kept then all taxable
• Exception: qualified non-personal use
vehicle (QNPV)
![Page 8: VA. Sheriffs’ Association Annual Conference By Wendy Speelman](https://reader035.vdocuments.us/reader035/viewer/2022070403/568139cc550346895da17a21/html5/thumbnails/8.jpg)
Qualified Non-personal Use Vehicle
• Must have policy on restricting personal
use of the vehicle
• Commuting is nontaxable to the employee
• Substantiation and record keeping is not
required
![Page 9: VA. Sheriffs’ Association Annual Conference By Wendy Speelman](https://reader035.vdocuments.us/reader035/viewer/2022070403/568139cc550346895da17a21/html5/thumbnails/9.jpg)
Examples of QNPV
• Clearly marked police and fire vehicles if:
• The employee is always on call
• Require to be used for commute
• The employer must prohibit personal use
for travel outside of the officer jurisdiction
• Readily apparent the vehicle is a public
safety vehicle (words or painted insignia)
![Page 10: VA. Sheriffs’ Association Annual Conference By Wendy Speelman](https://reader035.vdocuments.us/reader035/viewer/2022070403/568139cc550346895da17a21/html5/thumbnails/10.jpg)
Examples of QNPV continued
• Unmarked law enforcement vehicles if:
• Any personal use must be authorized by the
employer and must be incident to law-
enforcement functions
• The employer must be a govt. unit responsible
for prevention or investigation of crime
• Law enforcement officer must be full time,
execute warrants, make arrests & carry firearm
10
![Page 11: VA. Sheriffs’ Association Annual Conference By Wendy Speelman](https://reader035.vdocuments.us/reader035/viewer/2022070403/568139cc550346895da17a21/html5/thumbnails/11.jpg)
Not a qualified vehicle
![Page 12: VA. Sheriffs’ Association Annual Conference By Wendy Speelman](https://reader035.vdocuments.us/reader035/viewer/2022070403/568139cc550346895da17a21/html5/thumbnails/12.jpg)
12
Day Meals
• If the employer reimburses or pays for
meals on a day trip then:
• Include the cost of meal reimbursed to the
employee in their payroll as a fringe
benefit
• Subject to Federal Income Tax, Medicare
and SS if regular wages are subject to SS
and Medicare
• Revenue Ruling 75-432 & 75-170
![Page 13: VA. Sheriffs’ Association Annual Conference By Wendy Speelman](https://reader035.vdocuments.us/reader035/viewer/2022070403/568139cc550346895da17a21/html5/thumbnails/13.jpg)
Day Meals continued
• If union contract says to pay for meals
then reimburse but include in wages
• If have policy to pay for meals if traveling
out of county it is still taxable and included
in wages
• Must include in payroll the amount of lunch
as a noncash item
13
![Page 14: VA. Sheriffs’ Association Annual Conference By Wendy Speelman](https://reader035.vdocuments.us/reader035/viewer/2022070403/568139cc550346895da17a21/html5/thumbnails/14.jpg)
14
Meals at Conferences
• “Associated With” Meals - Tax-Free not
included in wages
• Meals at conventions
• Meals at conferences
• Does not include going to lunch with co-
worker (this would be personal & taxable
= include in wages)
![Page 15: VA. Sheriffs’ Association Annual Conference By Wendy Speelman](https://reader035.vdocuments.us/reader035/viewer/2022070403/568139cc550346895da17a21/html5/thumbnails/15.jpg)
• Behavioral Control - how, when and
where to do the work; training
• Financial Control - significant investment,
expenses, opportunity for profit or loss
• Relationship of the Parties - employee
benefits, written contracts
Independent Contractor or Employee
![Page 16: VA. Sheriffs’ Association Annual Conference By Wendy Speelman](https://reader035.vdocuments.us/reader035/viewer/2022070403/568139cc550346895da17a21/html5/thumbnails/16.jpg)
Resources
• Publication 1779 - determination on status
of worker as either an independent
contractor or an employee
• Publication 963 Chapter 3
• Revenue Ruling 87-41 – 20 factors
• Internal Revenue Code 3401
![Page 17: VA. Sheriffs’ Association Annual Conference By Wendy Speelman](https://reader035.vdocuments.us/reader035/viewer/2022070403/568139cc550346895da17a21/html5/thumbnails/17.jpg)
Supplemental Pay
• Compensation paid in addition to regular
wages
• Examples: overtime pay, bonus
• Withhold federal income tax at 25%
• Or use formula
• Subject to Medicare and SS if applicable
![Page 18: VA. Sheriffs’ Association Annual Conference By Wendy Speelman](https://reader035.vdocuments.us/reader035/viewer/2022070403/568139cc550346895da17a21/html5/thumbnails/18.jpg)
18
Department of the Treasury
Internal Revenue Service
www.irs.gov