IRS: Employer Hybrid Car Incentives Are Taxable Compensation
A number of large employers have launched programs offering employees incentives to purchase hybrid cars.
The IRS is offering guidance to employers who give cash incentives for
employees to buy hybrid cars.
The IRS says that the cash incentives are taxable compensation and employers
should include the cash incentive amounts in employees' compensation reported on
year-end Form W-2 earnings statements.
The cash incentives also are subject to income tax withholding and employment
tax, the IRS says. The tax code provides for an exclusion from income for
employee discounts only if the employer produces the product and certain other
requirements are met, the IRS says.
Spc. Jeffrey Hamme and Staff Sgt. Michelangelo Merksamer of HHC, 1/506th Infantry, point out features of the Hybrid Electric Humvee at the AUSA Annual Meeting earlier this month. The two Soldiers participated in a Military Utility Assessment of the prototype vehicle last month at Fort Campbell, Ky.
Ford's 'Hybrid Patrol,' a 10-city initiative this fall that aims to show hybrid drivers how to drive for best fuel economy. EV World photo of Bill and Lisa Hammond on way to first Ford Patrol event in Detroit during stop-over in Omaha.