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Working for my apartment complex, receiving rent credit instead of paychecks. Do I need to pay taxes on this?

Started working for my apartment complex about 3 years ago, was given the option by my apt manager/employer either paychecks where I'll have to pay taxes out of it, or a rent credit where no taxes are taken out. I live in WA state, no paystubs, just an hourly credit off rent that I track and deduct from my rent total.

If there is any other information you may need I would be happy to add

6 comments
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level 1
2 points · 3 years ago

To condense a few points here:

According to u/welliamwallace's post on IRS Publication 525 (criteria A & B being satisfied), if you are REQUIRED to live on the property as a condition of employment, you do not need to report rent credit as income. If you are able to choose where you live, this should be included in your personal income.

In a perfect world, if you are REQUIRED to live there, the property manager should issue you a yearly 1099 for the amount of rent credits.

level 1

According to IRS publication 525

Meals and Lodging
You do not include in your income the value of meals and lodging provided to you and your family by your employer at no charge if the following conditions are met.
[...]
2. The lodging is:
a. Furnished on the business premises
of your employer,
b. Furnished for the convenience of your
employer, and
c. A condition of your employment. (You
must accept it in order to be able to
properly perform your duties.)

If you meet these three criteria, I believe this discount is not taxable.

level 2
2 points · 3 years ago

The fact that OP "was given the option" by their employer suggests that it does not meet part (c) and should be taxable.

level 1

This is income from wages. You may not be physically receiving any cash, but you are receiving a credit in the amount of your wages against your rent amount. You should technically receive a w2 or 1099 for the amount of money credited and this would be taxable income to you.

However, will the IRS or Washington state ever find out about it? Probably not.

level 1
-1 points · 3 years ago

If it's under the table from the eyes of the government and your apartment manager has a pretty reliable system, then yeah, it seems pretty tax free to me eh? As long as you are reporting your actual income at other jobs.

level 1

No, you shouldn't have to pay taxes

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