Each state has its own policy for taxing lodging. In some states, lodging may be taxable for unemployment insurance and disability insurance even when it is exempt from income tax. Be sure to select Lodging for your employee:
To select Lodging:
- Click the Employees tab.
- Click the employee's name.
- In the Pay section, click Edit.
- Click Show all pay types and select Lodging.
- Click OK to save the changes.
In states where we support in-kind wages, we can determine whether or not the lodging is taxable from your answers in the employee setup and the law of your state. You must fill in the taxable value of the lodging. When possible, on the pay rate page, we describe the rule for your state for determining the taxable value of lodging, which may depend on market value or a state minimum. Be sure to select Lodging as a Pay Type for your employee at their Pay page.