Maintenance engineer is given an apartment

[Pacun]

A maintenance engineer is provided with an apartment by the employer because he is on call 24-5. He is off on Saturday and Sunday and goes to his house in another state which is about 20 miles away. His car and his house are registered in that state but his children go to a public school where he works. Is his house his primary residence?

[ILLMAS]

I would do a residency test, however don't know what difference it will make if he gets free rent from his employer. I would be concerned if the employer is not reporting FMV rent as additional compensation.

[Pacun]

I would do a residency test, however don't what difference it will make if he gets free rent from his employer. I would be concern if the employer is not reporting FMV rent as additional compensation.

Energy credit

[kcjenkins]

Given the facts you stated, this would not be taxable income to him. Its considered a working conditions fringe benefit, and excluded from W-2 wages. I suggest you read up on this in Pub 15-B.

[Pacun]

Given the facts you stated, this would not be taxable income to him. Its considered a working conditions fringe benefit, and excluded from W-2 wages. I suggest you read up on this in Pub 15-B.

Thank you. My question was about his primary residency for energy credits.

[kcjenkins]

Sorry, I was responding to MAS's post about the income. His primary residence would still be his home, in most cases, although it is a matter of intent and details. If he still owns the home, votes there, registers his car there, etc, it would be reasonable that it is still his primary home. The kids going to school where he works does throw a bit of dirt into the picture, however. Did he have to sign them up at that school as living in that town? Do they, in fact, live with him there? Clearly, if this job is temporary, and he plans to continue to live at his 'home' in the other state, then that is still his primary residence.

[Margaret CPA in OH]

For the sake of discussion and education, I would like to examine this situation a bit more closely primarily because I have had to deal with a resident caretaker at my church. When looking at the criteria on the IRS website, it seems to indicate that the living quarters must be at the business site. For example, an apartment on a university campus or within the church premises. I was just wondering if, in this case, the living quarters were on the business property or simply nearby and conveniently located.

I didn't immediately find anything that indicated that living quarters off site met the criteria. My personal belief is that it should not be included in income as a condition of employment but is that the case as presented here? What if the employee lived, in fact, quite nearby? Would it be required (not just provided) as a condition of employment to reside in that place?

I appreciate that I digress somewhat but do want to broaden the discussion and education about this issue.

[kcjenkins]

You are correct that in order for it to be excludable as a working condition fringe, it must be on the employer's site. I would guess that this is the case here, as normally if the employer provides housing free it is because they need him to be on-site at odd hours, to deal with problems as they occur. Naturally, that question should be asked, but when maintainace people are provided housing it is almost always on-site.