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Domestic Corporate Taxation

Corporate Employee: Housing

Employees can be reimbursed directly or indirectly (which includes services provided in kind) for moving expenses. Deductible moving expenses only include the reasonable expenses of moving household goods and personal effects and traveling (including lodging) from the former home to the new home.

Employees can be given lodging by an employer if it is provided on the business premises, if it is provided for the employer's convenience and if the employee accepts it as a condition of employment.

In July 2004, the American Institute of Certified Public Accountants (AICPA) urged Congress to reject a proposal contained in Senate tax legislation which aimed to restrict employer-provided housing benefit for workers based overseas. In a letter to House and Senate tax writers, the AICPA argued that the measure, which was included in the Senate ‘JOBS’ bill, "will reverse long-standing tax policy and result in the loss of American jobs and exports".

Overseas workers had been permitted to exclude up to $80,000 from American income taxes, and where employers pay for housing costs, individuals can exclude costs that are not considered to be “lavish or extravagant”.

However, under proposals advanced by Sen. Mary Landrieu (D-LA), the employer-paid housing costs would have been included in the $80,000 limit as part of a plan intended to help firms who continue to pay the salaries of National Guard and Reservists on active duty.

The AICPA expressed concern that if the proposal became law, it would lead to many foreign-based American workers losing their jobs, as firms would hire foreign employees in their place. The Institute was therefore delighted to learn that the provision did not pass with the rest of the JOBS Act. For 2012, housing costs are based on location up to a maximum of $128,000.

For 2012, the maximum foreign earned income exclusion is $95,100 per qualifying person; for 2013 it is $97,600.

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U.S. Tax Treaty Developments

Treaty Update: United States - Isle of Man
30 July, 2014
An amendment to the 2002 tax information exchange agreement between the Isle of Man and the United States entered into force on July 1, 2014.
Treaty Update: United States - Hong Kong
30 June, 2014
The tax information exchange agreement between the United States and Hong Kong entered into force on June 20, 2014.
Treaty Update: United States - Poland
27 May, 2014
A DTA signed between the United States and Poland was forwarded to the United States's Senate as part of the nation's domestic ratification procedures on May 20, 2014.
Treaty Update: United States - Switzerland
27 May, 2014
A vote to expedite domestic ratification procedures in the US with respect to the DTA Protocol signed with Switzerland failed on May 22, 2014, as a result of a block by Senator Rand Paul in the US Senate.
Treaty Update: United States - Spain
12 May, 2014
US President Barack Obama has forwarded the DTA Protocol signed with Spain to the nation's Senate for ratification. The pact would update the two nations' 1990 DTA.
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