By Payroll and Entitlements Editorial Staff
Final regulations increase a vehicle's maximum value for eligibility to use the fleet-average valuation rule or the vehicle cents-per-mile valuation rule. The regulations provide transition rules for certain employers. The final regulations are effective on the date of publication in the Federal Register.
Before the Tax Cuts and Job Act (TCJA) (P.L. 115-97), the maximum base fair market value of a vehicle for use of the fleet-average valuation rule was $16,500, as adjusted annually for inflation ($21,100 for a passenger automobile and $23,300 for a truck or van in 2017). The pre-TCJA maximum base fair market value of a vehicle for use of the vehicle cents-per-mile valuation rule was $12,800, as adjusted annually for inflation ($15,900 for a passenger automobile and $17,800 for a truck or van in 2017).
The TCJA increased these amounts to $50,000, adjusted for inflation. The IRS, therefore, issued Notice 2019-8 and Notice 2019-34 providing interim guidance, as well as proposed regulations, to reflect the increase. The final regulations update the fleet-average and vehicle cents-per-mile valuation rules to conform to the changes made by the TCJA.
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