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 Tax Adviser senior editor.