Employer Assisted With Rent

[Kurly]

Hi All:

Restaurant sent an employee to a distant city to open A new restaurant, so now they have 2, Do to rent being much higher in the new area, the company paid the rent and gave the employee the difference of what rent was in the old location versas the new location, via a monthly check. The employee was issued a 1099MISC, with $ 4,500 in box 7, for 2008. Employee was in the new location 3 years, this was the first year the employee received a 1099MISC. Employee is now back running the original restaurant. HOW WOULD YOU HANDLE THIS ON TAX RETURN?

Thanks All

Kurly

[Burke]

This is taxable income to the employee. Your post is a little unclear on what the employer actually paid. The rent for the new place? The rent for the old place? And then he gave the employee an additional monthly check for the difference between the old/new rent? Regardless, the amount the employer paid for the rent should have been added to the employee's W-2 as addl compensation. This cannot be treated as reimbursement of lodging as a temporary job travel expense. He was there 3 years. And it is way out of the league of a non-taxable de minimis fringe benefit. Now, you have to deal with the fact that he was given a 1099MISC for 2008 in the normal fashion. It appears he should have also included income in the previous years for the same thing.