elmetal

For parents there is no IRS exception. That's the source I need. Because 3 airlines off the top of my head charge imputed income for parents. Never for kids or spouses of course.

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.
I suspect however what you actually saw at those airlines was a policy to charge parents to pass ride. This has zero to do with imputed income or taxes.

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.

elmetal

Again, before listening to someone on the internet about what I can and can't pay taxes on, I need a source by the IRS saying it is exempt from the fringe benefits for parents. You are giving good information, no doubt. But when the IRS comes knocking, I need the law, not a company manual

tomgoodman

If the IRS taxes you for the buddy passes you give out, at least the recipients should get a tax deduction for the monetary loss, pain, and suffering caused by said buddy passes.

sMFer

Well, in past lives I've had non rev bennies for US, UA, DL, AA, F9 and now SW and have never had imputed income for my parents.

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FL370esq

Based on the price the "not-your-buddy" pass riders pay for the "privilege," the priority they are offered and the a$$ pain involved in trying to use them, pretty sure this borders on a violation of the Geneva Convention and, as such, would land you behind the glass wall in The Hague. 😁

badflaps

I think I just totalled out my last Depends............