Notice to employees of election not to withhold income tax on personal use of employer vehicles
Under IRS regulations, employees are subject to Federal and State income and withholding taxes on the value of their personal use of an employer-provided vehicle. These regulations allow employers the option not to withhold income taxes on this value. Employers are still required to include this value on the Form W-2 employees will receive.
Illinois State University is electing not to withhold income taxes on the value of an employee’s personal use of an employer-provided vehicle. Illinois State University is still required to withhold employment taxes (e.g. Medicare, Old-Age Survivor Disability Insurance) if applicable.
To avoid paying additional taxes when filing their tax return, employees may wish to amend their Form W-4 (Withholding Certificate) to provide additional withholding. Alternatively, employees may wish to make payments of estimated taxes by filing a Form 1040-ES.