Inflation adjustments for 2017 issued for employer-provided vehicles

By Sally P. Schreiber, J.D.

The IRS issued the 2017 inflation-adjusted amounts for the maximum vehicle values for purposes of determining the amount that is included in employees’ income for personal use of an employer-provided vehicle (Notice 2017-3).

The limits for passenger vehicles are the same or slightly lower in 2017 than they were in 2016, but the values for vans and trucks increased slightly.

Under Regs. Sec. 1.61-21(d), an employer can use the fleet-average valuation rule to calculate the amount of income an employee must include as taxable income only when the average value of the vehicles in the fleet does not exceed a certain amount, which is adjusted every year according to the consumer price index.

For 2017, those maximum amounts are $21,100 for a passenger automobile (down from $21,200 in 2016) and $23,300 for a truck or van (an increase from $23,100).

Regs. Sec. 1.61-21(e) provides the maximum value of a vehicle for which the cents-per-mile method may be used to calculate taxable personal use of an employer-provided vehicle. For 2017, those amounts are $15,900 for a passenger vehicle (unchanged from 2016) and $17,800 for a truck or van (an increase from $17,700).

Sally P. Schreiber (Sally.Schreiber@aicpa-cima.com) is a JofA senior editor.

SPONSORED REPORT

2018 financial reporting survey: Challenges and trends

Learn the top reporting challenges that emerged in a survey of more than 800 finance, accounting, and compliance professionals across the world, and compare them with your organization's obstacles.

PODCAST

How the skill set for today’s CFO is changing

Scott Simmons, a search expert for large-company CFOs, gives advice for the next generation of finance leaders and more, including which universities are regularly producing future CEOs and CFOs.