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It sounds too good to be true, but it’s not! IF YOU QUALIFY, you may either receive employer-provided housing or per diem tax-free; or deduct them on your tax return if not provided.
Generally, any payment made by your employer on your behalf, whether paid directly to you, or to someone else (such as rent or a car), is taxable compensation, reported as wages on your W-2, and subject to tax withholding.
The exception to the rule is employee business expenses. If you incur a deductible expense, you can either deduct it on your tax return, or receive a reimbursement from your employer. If you receive a reimbursement equal to the expense, since it would have been deductible, the reimbursement is not taxable (subject to some other rules, of course).
So, if you paid for lodging or meals, and it was a deductible business expense, and were reimbursed by your employer, the reimbursement would be tax-free. In effect, your company paid the exact amount for the lodging, and you weren’t taxed.
By the same token, if your employer pays directly for the lodging, and it would have been deductible, had you paid for it yourself, then the payment is also tax-free, just like a reimbursement.
Any business expense paid by you, but not reimbursed by your employer, may be deducted on your tax return (to the extent that it exceeds the standard deduction for your filing status).
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