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University Courtesy Vehicle Procedure

The University has an established procedure to impute taxable income for University’s vehicles that are made available to the University employees for business use throughout the year. Towards the end of the calendar year, the University Controller’s Office receives Third Party Vehicle Worksheet from individual employees reporting the personal and business use of the vehicle in their possession. The Controller’s Office calculates the taxable benefit for the personal use of the vehicle and submits it to the Payroll Office to record it in the employee’s earning record and withholds required tax at the next pay period accordingly. Depending on the value of the benefit received, the amount of taxes withhold at one time may be significant. The net pay (take home pay) would be reduced by the amount of taxes taken out and that amount may be significant. As a result, the University has made a decision to spread the withholding from January 16th to December 31st pay periods.

PROCEDURE

Controller’s Office:

  • Send a reminder to complete Third Party Vehicle Worksheet to eligible  employee in October
  • Receive completed (actual) Third Party Vehicle Worksheet from the employees by November 20th
  • Run SAS report to obtain total taxable benefit recorded in the employees’ earning records
  • Calculate any adjustment needed for each employee by comparing estimate recorded in the employee’s earning record to the actual taxable benefit received; then adjust accordingly. This adjustment would be reflected in December 31st paycheck
  • Submit the adjustment to the Payroll office by agreed upon date
  • Calculate estimated benefit for next year based on previous year amount, the annual amount would be divided by 24 pay periods
  • Inform Payroll Office of the new benefit amount by January 8th
  • Inform Payroll of any adjustment needed for terminated employees before their final pay

 

Employee:

  • Employee determines if Controller’s Office should use previous year taxable benefit to calculate current year estimated taxable benefit or submit Third Party Vehicle Worksheet base on estimate
  • New employee requests payroll deduction from the Controller’s Office either by completing estimated Third Party Worksheet or requesting the use of their predecessor’s actual benefit
  • Submit actual Third Party Vehicle Worksheet to the University Controller’s Office by November 20th, of the current year; this should cover November 16th of previous year to November 15th of the current year
  • Employee reviews his or her December 31st paycheck for accuracy.
  • Terminated employee would complete final Worksheet and submit it to designated employee in the department who will submit it to Controller’s Office for process

 

Payroll Office:

  • Receive estimated employee taxable benefit from the University Controller’s Office by January 8th
  • Record estimated taxable benefit in employees’ earning record from January 16th to December 31st
  • Adjust employee earning record based on data received from Controller’s Office. This adjustment would be reflected in employee’s December 31st paycheck
  • Receive next year estimated employee taxable benefit from the University Controller’s Office by January 8th and record accordingly
  • Resume new payroll deduction from January 16th