Originally Posted by sailingfun

They can charge anything they want as imputed income. If they are the employees parents they are doing it wrong and when you file your taxes you need not claim that income.


Background information: Before the new pass travel policy took effect in March 2012, United retirees may not have paid a lot of imputed taxes because service charges on that travel offset the taxes. Now, many pass riders fly “service charge waived” system-wide, so imputed taxes add up fast.

The U.S. government deems pass travel by certain pass riders as a “taxable benefit"; which triggers "imputed taxes". They accrue whenever your taxable pass riders use personal passes or vacation passes.

By law, United must keep track of each employee/retiree's "Pass Tax Value". If your "taxable pass riders" fly using your passes during the year then United will send you an invoice each quarter for withholding taxes you must pay. In January you will receive a W-2 form that reflects the total Pass Tax value and how much you paid in withholding during the last fiscal year. The W-2 will be reported to the IRS; you must declare it on your taxes.
NOTE: Previously, retirees did not pay withholding taxes quarterly, we were sent a 1099 for the entire year. In January 2018 you may have received your final 1099 form (if your taxable pass riders accrued more than $600 of Pass Tax). Going forward, we will be invoiced quarterly (beginning in March 2018 for Pass Travel from 11/1/2017- 10/31/2018) and we will receive a W-2 form in January 2019. There is no $600 threshold with the new W-2 reporting method.


What gets taxed? Pass travel by the retiree's "taxable pass riders": domestic partner, enrolled friends and non-dependent children after age 18 or 23 (if attending school). Employees also pay tax on buddy travel.

What does NOT get taxed? Pass travel by "non-taxable pass riders": the retiree, spouse, parents and dependent children < 26 yrs old.