Meals or lodging furnished for the convenience of the employer
Meals and lodging furnished to employee, his spouse, and his dependents, pursuant to employment
There shall be excluded from gross income of an employee the value of any meals or lodging furnished to him, his spouse, or any of his dependents by or on behalf of his employer for the convenience of the employer, but only if—
in the case of meals, the meals are furnished on the business premises of the employer, or
in the case of lodging, the employee is required to accept such lodging on the business premises of his employer as a condition of his employment.
Special rules
For purposes of subsection (a)—
Provisions of employment contract or State statute not to be determinative
Certain factors not taken into account with respect to meals
Certain fixed charges for meals
In general
If—
an employee is required to pay on a periodic basis a fixed charge for his meals, and
such meals are furnished by the employer for the convenience of the employer,
there shall be excluded from the employee’s gross income an amount equal to such fixed charge.
Application of subparagraph (A)
Subparagraph (A) shall apply—
whether the employee pays the fixed charge out of his stated compensation or out of his own funds, and
only if the employee is required to make the payment whether he accepts or declines the meals.
Meals furnished to employees on business premises where meals of most employees are otherwise excludable
Employees living in certain camps
In general
Camp
For purposes of this section, a camp constitutes lodging which is—
provided by or on behalf of the employer for the convenience of the employer because the place at which such individual renders services is in a remote area where satisfactory housing is not available on the open market,
located, as near as practicable, in the vicinity of the place at which such individual renders services, and
furnished in a common area (or enclave) which is not available to the public and which normally accommodates 10 or more employees.
Lodging furnished by certain educational institutions to employees
In general
Exception in cases of inadequate rent
Paragraph (1) shall not apply to the extent of the excess of—
the lesser of—
5 percent of the appraised value of the qualified campus lodging, or
the average of the rentals paid by individuals (other than employees or students of the educational institution) during such calendar year for lodging provided by the educational institution which is comparable to the qualified campus lodging provided to the employee, over
the rent paid by the employee for the qualified campus lodging during such calendar year.
The appraised value under subparagraph (A)(i) shall be determined as of the close of the calendar year in which the taxable year begins, or, in the case of a rental period not greater than 1 year, at any time during the calendar year in which such period begins.
Qualified campus lodging
For purposes of this subsection, the term “qualified campus lodging” means lodging to which subsection (a) does not apply and which is—
located on, or in the proximity of, a campus of the educational institution, and
furnished to the employee, his spouse, and any of his dependents by or on behalf of such institution for use as a residence.
Educational institution, etc.
For purposes of this subsection—
In general
The term “educational institution” means—
an institution described in section 170(b)(1)(A)(ii) (or an entity organized under State law and composed of public institutions so described), or
an academic health center.
Academic health center
For purposes of subparagraph (A), the term “academic health center” means an entity—
which is described in section 170(b)(1)(A)(iii),
which receives (during the calendar year in which the taxable year of the taxpayer begins) payments under subsection (d)(5)(B) or (h) of section 1886 of the Social Security Act (relating to graduate medical education), and
which has as one of its principal purposes or functions the providing and teaching of basic and clinical medical science and research with the entity’s own faculty.
Source
(Aug. 16, 1954, ch. 736, 68A Stat. 39; Pub. L. 95–427, § 4(a),Notes
References in Text
Amendments
Effective Date of 1998 Amendment
Effective Date of 1996 Amendment
Effective Date of 1988 Amendment
Effective Date of 1986 Amendment
Effective Date of 1981 Amendment
Effective Date of 1980 Amendment
Effective Date of 1978 Amendment
Effective Date of 1978 Amendment; Election of Prior Law
Statute of Limitations
Treatment of Certain Statutory Subsistence Allowances or Subsistence Allowances Negotiated in Accordance With State Law Received by State Police Officers Before January 1, 1978
General Rule.—
If—
an individual who was employed as a State police officer received a statutory subsistence allowance or a subsistence allowance negotiated in accordance with State law while so employed,
such individual elects, on or before
this section applies to such allowance,
then, for purposes of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], such allowance shall not be included in such individual’s gross income.
Allowances to Which Section Applies.—
For purposes of this section, this section applies to any statutory subsistence allowance or subsistence allowance negotiated in accordance with State law which was received—
after
during the calendar year 1974, 1975, 1976, or 1977.
Other Definitions.—
For purposes of this section—
State police officer.—
The term ‘State police officer’ means any police officer (including a highway patrolman) employed by a State (or the District of Columbia) on a full-time basis with the power to arrest.
Income tax return.—
The term ‘income tax return’ means the return of the taxes imposed by subtitle A of the Internal Revenue Code of 1986. If an individual filed before
Limitation on Deduction.—
If any individual receives a subsistence allowance which is excluded from gross income under subsection (a), no deduction shall be allowed under any provision of chapter 1 of the Internal Revenue Code of 1986 for expenses in respect of which he has received such allowance, except to the extent that such expenses exceed the amount excludable from gross income under subsection (a) and the excess is otherwise allowed as a deduction under such chapter 1.
Statute of Limitations.—
If refund or credit of any overpayment of tax resulting from the application of this section is prevented at any time on or before