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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15580
Experience:  15years with H & R Block. Divisional leader, Instructor
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Can a company (LLC) pay an employee's rent directly to the

Customer Question

Can a company (LLC) pay an employee's rent directly to the residential leasing company (the money never flows directly to the employee) and avoid payroll taxes?
Additional information that may or may not be relevant - the LLC is based in CA and the employee is an official resident of IL. He splits time between IL and CA. He owns a condo in IL and rents in CA.
Submitted: 11 months ago.
Category: Tax
Expert:  Robin D. replied 11 months ago.

Hello, I'm Robin. Welcome to JustAnswer. I'm reviewing your question now and typing up my reply. I'll post that in just a few moments.

Expert:  Robin D. replied 11 months ago.

If the employee is not regularly assigned to the location (CA) then the rent would not be considered taxable income to him. If CA is a regular assigned location for business then this is included in his taxable income.

For lodging to be exempt he would need to be on a temporary assignment or be under the rules for fringe benefit of lodging.

The lodging is exempt if:

  1. Furnished on the business premises of your employer,

  2. Furnished for the convenience of your employer, and

  3. A condition of your employment. (You must accept it in order to be able to properly perform your duties.)

Expert:  Robin D. replied 11 months ago.

Paying the rental amount directly does not change the rules on the taxable income unfortunately.