26 U.S.C. § 119

Meals or lodging furnished for the convenience of the employer

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(a) Meals and lodging furnished to employee, his spouse, and his dependents, pursuant to employmentThere shall be excluded from gross income of an employee the value of any meals or lodging furnished to him, his spouse, or any of his dependents by or on behalf of his employer for the convenience of the employer, but only if—(1) in the case of meals, the meals are furnished on the business premises of the employer, or(2) in the case of lodging, the employee is required to accept such lodging on the business premises of his employer as a condition of his employment.(b) Special rulesFor purposes of subsection (a)—(1) Provisions of employment contract or State statute not to be determinative

In determining whether meals or lodging are furnished for the convenience of the employer, the provisions of an employment contract or of a State statute fixing terms of employment shall not be determinative of whether the meals or lodging are intended as compensation.

(2) Certain factors not taken into account with respect to meals

In determining whether meals are furnished for the convenience of the employer, the fact that a charge is made for such meals, and the fact that the employee may accept or decline such meals, shall not be taken into account.

(3) Certain fixed charges for meals(A) In generalIf—(i) an employee is required to pay on a periodic basis a fixed charge for his meals, and(ii) such meals are furnished by the employer for the convenience of the employer,there shall be excluded from the employee’s gross income an amount equal to such fixed charge.(B) Application of subparagraph (A)Subparagraph (A) shall apply—(i) whether the employee pays the fixed charge out of his stated compensation or out of his own funds, and(ii) only if the employee is required to make the payment whether he accepts or declines the meals.(4) Meals furnished to employees on business premises where meals of most employees are otherwise excludable

All meals furnished on the business premises of an employer to such employer’s employees shall be treated as furnished for the convenience of the employer if, without regard to this paragraph, more than half of the employees to whom such meals are furnished on such premises are furnished such meals for the convenience of the employer.

In the case of an individual who is furnished lodging in a camp located in a foreign country by or on behalf of his employer, such camp shall be considered to be part of the business premises of the employer.

(2) CampFor purposes of this section, a camp constitutes lodging which is—(A) provided by or on behalf of the employer for the convenience of the employer because the place at which such individual renders services is in a remote area where satisfactory housing is not available on the open market,(B) located, as near as practicable, in the vicinity of the place at which such individual renders services, and(C) furnished in a common area (or enclave) which is not available to the public and which normally accommodates 10 or more employees.(d) Lodging furnished by certain educational institutions to employees(1) In general

In the case of an employee of an educational institution, gross income shall not include the value of qualified campus lodging furnished to such employee during the taxable year.

(2) Exception in cases of inadequate rentParagraph (1) shall not apply to the extent of the excess of—(A) the lesser of—(i) 5 percent of the appraised value of the qualified campus lodging, or(ii) the average of the rentals paid by individuals (other than employees or students of the educational institution) during such calendar year for lodging provided by the educational institution which is comparable to the qualified campus lodging provided to the employee, over(B) the rent paid by the employee for the qualified campus lodging during such calendar year.The appraised value under subparagraph (A)(i) shall be determined as of the close of the calendar year in which the taxable year begins, or, in the case of a rental period not greater than 1 year, at any time during the calendar year in which such period begins.(3) Qualified campus lodgingFor purposes of this subsection, the term “qualified campus lodging” means lodging to which subsection (a) does not apply and which is—(A) located on, or in the proximity of, a campus of the educational institution, and(B) furnished to the employee, his spouse, and any of his dependents by or on behalf of such institution for use as a residence.(4) Educational institution, etc.For purposes of this subsection—(A) In generalThe term “educational institution” means—(i) an institution described in section 170(b)(1)(A)(ii) (or an entity organized under State law and composed of public institutions so described), or(ii) an academic health center.(B) Academic health centerFor purposes of subparagraph (A), the term “academic health center” means an entity—(i) which is described in section 170(b)(1)(A)(iii),(ii) which receives (during the calendar year in which the taxable year of the taxpayer begins) payments under subsection (d)(5)(B) or (h) of section 1886 of the Social Security Act (relating to graduate medical education), and(iii) which has as one of its principal purposes or functions the providing and teaching of basic and clinical medical science and research with the entity’s own faculty.(Aug. 16, 1954, ch. 736, 68A Stat. 39; Pub. L. 95–427, § 4(a), Oct. 7, 1978, 92 Stat. 997; Pub. L. 95–615, title II, § 205, Nov. 8, 1978, 92 Stat. 3107; Pub. L. 96–222, title I, § 108(a)(1)(G), Apr. 1, 1980, 94 Stat. 225; Pub. L. 97–34, title I, § 113, Aug. 13, 1981, 95 Stat. 195; Pub. L. 99–514, title XI, § 1164(a), Oct. 22, 1986, 100 Stat. 2511; Pub. L. 100–647, title I, § 1011B(d), Nov. 10, 1988, 102 Stat. 3489; Pub. L. 104–188, title I, § 1123(a), Aug. 20, 1996, 110 Stat. 1768; Pub. L. 105–206, title V, § 5002(a), July 22, 1998, 112 Stat. 788.)Editorial NotesReferences in Text

Section 1886(d)(5)(B) or (h) of the Social Security Act, referred to in subsec. (d)(4)(B)(ii), is classified to section 1395ww(d)(5)(B) or (h) of Title 42, The Public Health and Welfare.

Amendments

1998—Subsec. (b)(4). Pub. L. 105–206 added par. (4).

1996—Subsec. (d)(4). Pub. L. 104–188 amended par. (4) generally. Prior to amendment, par. (4) read as follows: “Educational institution.—For purposes of this paragraph, the term ‘educational institution’ means an institution described in section 170(b)(1)(A)(ii).”

1988—Subsec. (d). Pub. L. 100–647 struck out “(as of the close of the calendar year in which the taxable year begins)” after “appraised value” in par. (2)(A)(i) and inserted at end “The appraised value under subparagraph (A)(i) shall be determined as of the close of the calendar year in which the taxable year begins, or, in the case of a rental period not greater than 1 year, at any time during the calendar year in which such period begins.” as concluding provision.

1986—Subsec. (d). Pub. L. 99–514 added subsec. (d).

1981—Subsec. (c). Pub. L. 97–34 added subsec. (c).

1980—Subsec. (a). Pub. L. 96–222 struck out “General rule” in subsec. (a) as in effect on the day before the date of enactment of the Foreign Earned Income Act of 1978 to correct a legislative oversight in the amendment of subsec. (a) of this section by section 205 of Pub. L. 95–615. The amendment by Pub. L. 95–615, however, was executed without reference to “General rule” as the probable intent of Congress, thereby requiring no change in text.

1978—Subsec. (a). Pub. L. 95–615 designated existing provisions as subsec. (a), added subsec. (a) heading, and substituted “furnished to him, his spouse, or any of his dependents by or on behalf of his employer for the convenience of the employer” for “furnished to him by his employer for the convenience of the employer”.

Pub. L. 95–427 inserted provisions relating to factors not taken into account with respect to meals and certain fixed charges for meals.

Statutory Notes and Related SubsidiariesEffective Date of 1998 Amendment

Pub. L. 105–206, title v, § 5002(b), July 22, 1998, 112 Stat. 789, provided that: “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning before, on, or after the date of the enactment of this Act [July 22, 1998].”

Effective Date of 1996 Amendment

Pub. L. 104–188, title I, § 1123(b), Aug. 20, 1996, 110 Stat. 1768, provided that: “The amendment made by this section [amending this section] shall apply to taxable years beginning after December 31, 1995.”

Effective Date of 1988 Amendment

Amendment by Pub. L. 100–647 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 1019(a) of Pub. L. 100–647, set out as a note under section 1 of this title.

Effective Date of 1986 Amendment

Pub. L. 99–514, title XI, § 1164(b), Oct. 22, 1986, 100 Stat. 2511, provided that: “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after December 31, 1985.”

Effective Date of 1981 Amendment

Amendment by Pub. L. 97–34 applicable with respect to taxable years beginning after Dec. 31, 1981, see section 115 of Pub. L. 97–34, set out as a note under section 911 of this title.

Effective Date of 1980 Amendment

Amendment by Pub. L. 96–222 effective as if included in the Foreign Earned Income Act of 1978, Pub. L. 95–615, see section 108(a)(2)(A) of Pub. L. 96–222, set out as a note under section 3 of this title.

Effective Date of 1978 Amendment

Pub. L. 95–427, § 4(b), Oct. 7, 1978, 92 Stat. 998, provided that: “The amendment made by subsection (a) [amending this section] shall apply with respect to taxable years beginning after December 31, 1953, and ending after August 16, 1954.”

Effective Date of 1978 Amendment; Election of Prior Law

Amendment by Pub. L. 95–615 applicable to taxable years beginning after Dec. 31, 1977, with provision for election of prior law, see section 209 of Pub. L. 95–615, set out as a note under section 911 of this title.

Statute of Limitations

Pub. L. 96–605, title I, § 107(b), Dec. 28, 1980, 94 Stat. 3524, provided that: “In the case of any allowance received during calendar year 1974, 1975, 1976, or 1977, subsections (a)(2) and (e) of such section 3 [section 3 of Pub. L. 95–427, set out below] shall be applied by substituting the date one year after the date of the enactment of this Act [Dec. 28, 1980] for ‘April 15, 1979’ each place it appears.”

Treatment of Certain Statutory Subsistence Allowances or Subsistence Allowances Negotiated in Accordance With State Law Received by State Police Officers Before January 1, 1978

Pub. L. 95–427, § 3, Oct. 7, 1978, 92 Stat. 996, as amended by Pub. L. 96–605, title I, § 107(a), Dec. 28, 1980, 94 Stat. 3524; Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, provided that:“(a)General Rule.—If—“(1) an individual who was employed as a State police officer received a statutory subsistence allowance or a subsistence allowance negotiated in accordance with State law while so employed,“(2) such individual elects, on or before April 15, 1979, and in such manner and form as the Secretary of the Treasury may prescribe, to have this section apply to such allowance, and“(3) this section applies to such allowance,then, for purposes of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], such allowance shall not be included in such individual’s gross income.“(b)Allowances to Which Section Applies.—For purposes of this section, this section applies to any statutory subsistence allowance or subsistence allowance negotiated in accordance with State law which was received—“(1) after December 31, 1969, and before January 1, 1974, to the extent such individual did not include such allowance in gross income on his income tax return for the taxable year in which such allowance was received, or“(2) during the calendar year 1974, 1975, 1976, or 1977.“(c)Other Definitions.—For purposes of this section—“(1)State police officer.—The term ‘State police officer’ means any police officer (including a highway patrolman) employed by a State (or the District of Columbia) on a full-time basis with the power to arrest.“(2)Income tax return.—The term ‘income tax return’ means the return of the taxes imposed by subtitle A of the Internal Revenue Code of 1986. If an individual filed before November 29, 1977, an amended return for any taxable year, such amended return shall be treated as the return for such taxable year.“(d)Limitation on Deduction.—If any individual receives a subsistence allowance which is excluded from gross income under subsection (a), no deduction shall be allowed under any provision of chapter 1 of the Internal Revenue Code of 1986 for expenses in respect of which he has received such allowance, except to the extent that such expenses exceed the amount excludable from gross income under subsection (a) and the excess is otherwise allowed as a deduction under such chapter 1.“(e)Statute of Limitations.—If refund or credit of any overpayment of tax resulting from the application of this section is prevented at any time on or before April 15, 1979, by the operation of any law or rule of law (including res judicata), refund or credit of such overpayment (to the extent attributable to the application of this section) may, nevertheless, be made or allowed if claim therefor is filed on or before April 15, 1979.”

Notes of Decisions

Cited in 75 cases (2 in the last 5 years), 1934–2021 · leading case: Comm'r v. Kowalski, 434 U.S. 77 (1977).

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Comm'r v. Kowalski, 434 U.S. 77 (1977). · cites it 4× “§ 61 (a), [1] and, if so, are otherwise excludable under § 119 of the Code, 26 U. S. C. § 119 . [2] *79 I The pertinent facts are not in dispute.”

Comm'r v. Wodehouse, 337 U.S. 369 (1949). · cites it 10× “53 -55, 26 U.S.C. § 119 . APPENDIX B. "THE CURTIS PUBLISHING COMPANY INDEPENDENCE SQUARE PHILADELPHIA February 22, 1938 "Paul R.”

Rowan Cos. v. United States, 452 U.S. 247 (1981). · cites it 2× “26 U. S. C. § 119 (1976 ed., Supp. III). [8] Petitioner's provision of meals and lodging to employees on its offshore rigs satisfied each of these § 119 requirements.”

Cent. Illinois Pub. Serv. Co. v. United States, 435 U.S. 21 (1978). · cites it 2× “Its pertinency for the present withholding tax litigation is necessarily confined to the income tax aspects of the lunch reimbursements to the Company's employees.”

Annie Gaylor v. Steven Mnuchin, 919 F.3d 420 (7th Cir. 2019). “The principal statute is 26 U.S.C. § 119 (a)(2) and exempts meals and lodging furnished to employees if they meet five requirements: the meal or lodging is furnished (1) by an employer to an employee, (2) in kind (as opposed to in cash), (3) on the business premises of the…”

Richard R. Sibla v. Comm'r of Internal Revenue, Robert E. Cooper v. Comm'r of Internal Revenue, 611 F.2d 1260 (9th Cir. 1980). “A concurring opinion written by Judge Simpson, *1262 although allowing the deduction, chose to do so under the provisions of section 119 ( 26 U.S.C. § 119 ) and would have disallowed it under section 162(a).”

Sabatini v. Comm'r of Internal Revenue, 98 F.2d 753 (2d Cir. 1938). · cites it 2× “119 of the Revenue Law of 1928, 26 U.S.C.A. § 119 , gross income to be treated as income from sources within this country is defined and under Sec.”

Goldsboro Christian Schs., Inc. v. United States, 436 F. Supp. 1314 (E.D.N.C. 1977). · cites it 3× “26 U.S.C. § 119 4 provides a limited exclusion of lodging in certain carefully circumscribed instances.”

Diaz v. Silver Bay Logging, Inc., 55 P.3d 732 (Alaska 2002). · cites it 2× “See 26 U.S.C. § 119 (a) (2002). [10] Alaska R.”

United States v. Lonnie Glen Schmidt, United States of Am. v. Thomas Calvin Dunlap, Sr., United States of Am. v. James Eugene Lewis, 935 F.2d 1440 (4th Cir. 1991). “to give appellants fair warning that the sale of UBOs was criminal, because here questions of tax liability revolved around the subsequent taking of deductions against income generated by the UBOs, an area of the law supposedly riddled by vague and highly debatable…”

Boyd Gaming Corp. v. Comm'r, 177 F.3d 1096 (9th Cir. 1999). · cites it 5× “§ 132 (e); see 26 U.S.C. § 119 (a) & (b)(4). The Tax Court rejected Boyd’s “convenience of the employer” argument and held that Boyd’s deductions for employee meals were limited to 80% of the related expenses under the general rule of section 274(n).”

Union Pac. R.R. Co. v. United States, 865 F.3d 1045 (8th Cir. 2017). “See 26 U.S.C. § 119 (b)(3). Section 119(b)(3) treats those circumstances for tax purposes as if the employer had never paid the employee that money.”

Show all 75 citing cases →

— 26 U.S.C. § 119(c)(3) — 1 case

Comm'r of Int. Rev. v. Hawaiian Philippine Co., 100 F.2d 988 (9th Cir. 1939).

— 26 U.S.C. § 119(e) — 1 case

M/v Nonsuco, Inc. v. Comm'r of Internal Revenue, S/s San Vincente, Inc. v. Comm'r of Internal Revenue, 234 F.2d 583 (4th Cir. 1956).

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