IRS asked to clarify tax treatment of employer-provided vehicle charging

Senate Finance Committee ranking member Ron Wyden, D-Ore., has asked the IRS to issue guidance clarifying that electrical vehicle (EV) charging provided by employers is a de minimis fringe benefit
under Code Sec. 132(e) meaning it should not be included as an employee’s
income because it is so small as to make accounting for it unreasonable
or administratively impractical. In a March 23 letter to IRS Commissioner
John Koskinen, Wyden said the “ambiguity of the tax treatment has
left employers not knowing how to treat the benefit for tax purposes.”

“The continued growth of this technology is being hampered by
the lack of clarity in federal tax law,” said Wyden. “The IRS needs
to end the uncertainty for businesses which are eager to help grow
this important piece of American infrastructure.”

Wyden pointed out that adding the necessary equipment for payment
and tracking can nearly triple the cost of an EV charging station,
in addition to service fees in excess of $200 per month. “These costs
dwarf the value of the benefits, especially for small and mid-sized
firms,” he wrote.

The Department of Energy, along with businesses across the country,
have been working to install EV charging stations to help grow electric
charging infrastructure. Wyden said the lack of guidance from the
IRS regarding the tax treatment of workplace EV charging has created
uncertainty for participating businesses and could prevent others
from installing these chargers due to the high cost of tracking charge
usage.

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