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DUAL STATE EMPLOYMENT

  1. AUTHORITY

    Section 5-208a of the Connecticut General Statutes provides that compensation by more than one agency is restricted. Multiple job assignments within the same agency is restricted. No state employee shall be compensated for services rendered to more than one state agency during a bi-weekly pay period unless the appointing authority of each agency or his designee certifies that the duties performed are outside the responsibility of the agency of principal employment, that the hours worked at each agency ar documented and reviewed to preclude duplicate payment and that no conflicts of interest exist between services performed. No state employee who holds multiple job assignments within the same state agency shall be compensated for services rendered to such agency during a biweekly pay period unless the appointing authority of such agency or his designee certifies that the duties performed are not in conflict with the employee's primary responsibility to the agency, that those hours worked on each assignment are documented and reviewed to preclude duplicate payment and that there is no conflict of interest between the services performed.

    1. Form PER-DE-1 is required to be filled out in order to comply with provision of Section 5-208a.
    2. When an individual applies for part-time employment in an agency or institution, the agency payroll or personnel unit should determine whether or not the individual is at present, or ever was, employed by a state agency and thus avoid the possible issuance of a second employee number to an individual who already possesses an employee number with the state.
      1. Only one employee number should be used per individual regardless of the number of positions held in the state or agencies the employee has worked.
      2. Employees on more than one payroll must have the same retirement code even though in different agencies.

PAYMENT OF EMPLOYEES HIRED BY CONTRACT

This section is presently being reviewed by the Office of the State Comptroller, the Department of Administrative Services and the Office of the Attorney General. When completed, this study will be distributed as an addendum to this manual.

REIMBURSEMENT OF FRINGE BENEFITS FROM FEDERAL OR OTHER FUNDS

  1. Each payroll which contains personal services charges to be paid for from any source other than the state's General Fund appropriation(s), (i.e., Federal, Working Capital, Extension Funds, etc.) must include a Reimbursable Cost Recovery Report (form CO-826). Such payrolls are referred to as covered payrolls. A CO-826 must be submitted with each covered payroll whether or not a variance or exemption may have been granted for some or all of the agency's other funds. The date and amount of the variance or exemption must be referenced on the CO-826.
  2. Fringe benefit costs are the state's share of:
    1. Retirement Contributions
    2. Retirement Division Operating Costs
    3. F.I.C.A.
    4. Group Life Insurance Costs
    5. Group Health Insurance Costs
    6. Unemployment Compensation
    7. Workers' Compensation
    8. Health Services for State Employees
  3. Refer to the Indirect Cost and Fringe Benefit Recovery Manual issued through the Accounting Systems Division of the Office of the State Comptroller for guidelines and agency procedures.

UNEMPLOYMENT COMPENSATION FOR STATE EMPLOYEES
SECTIONS 31-222(a)(1)(C) & (D), 31-225(d) AND 31-227
OF THE GENERAL STATUTES

Persons employed by the State of Connecticut are covered by the provisions of Chapter 567, Unemployment Compensation, of the Connecticut General Statutes; therefore, persons who terminate employment with the state are eligible to apply for unemployment compensation benefits. The procedures which must be observed in making application and award of compensation are described below.

When an employee is terminating employment with the state, the employing agency must prepare an "Unemployment Notice" (Form UC-61) in triplicate and distribute it as follows:

Original - Employee
Duplicate - Mail to R.E. Harrington, Inc., P.O. Box 11874,
Federal Square Station, Harrisburg, PA 17108-1874
Triplicate - Placed in the terminating employee's personnel
records

Requests for supplies of Form UC-61 should include the requesting agency's name, address of the state's unemployment claims administrator (c/o R.E. Harrington, Inc., P.O. Box 11874, Federal Square Station, Harrisburg, PA 17108-1874) and the special identification number (assigned to the agency by the Employment Security Division). The request should be directed to:

Department of Labor
Employment Security Division
200 Folly Brook Boulevard
Wethersfield, CT 06109
Attn: Business Manager

When a separated employee files a claim for unemployment benefits, and your agency was the last employer, the Employment Security Office will issue a "Notice of Hearing and Unemployment Compensation Claim", Form UC-840, unless you indicated on the "Unemployment Notice", Form UC-1, that the claimant was separated due to "lack of work" or other obviously non-disqualifying reasons. This form must be received by the Employment Security Office within 10 days of its mailing date. You may respond directly to the Employment Security Office or mail or fax the form to REH to respond. If you respond directly, send a copy of the response to REH.

Other forms may also be issued by the Employment Security Office, including the "Notice of Potential Liability", Form UC-280 and "Notice to Employer of Approval of Claim for Benefits", Form UC-56KC. Forward these or other unemployment forms immediately to REH. REH may call the employing agency for more details regarding the claimant's separation.

If the separation information provided to REH indicates that a disqualification should be imposed by the Employment Security Division, REH will protest any determination approving benefits and request a hearing on the issue.

When the hearing notice is issued, REH will contact the employing agency to review the issues involved. The necessary documentation to be presented at the hearing as evidence will be identified. The appropriate witness or witnesses will be determined also. It is essential that the employing agency provide individuals with direct, firsthand knowledge of the reasons for the claimant's separation at the hearing. Hearsay testimony will not be given consideration by the Referee.

If a particular case presents a complicated or precedent-setting issue, REH will assign a representative to attend the hearing with the employing agency witness.

It is of the utmost importance, in all cases concerning the payment of unemployment compensation benefits to former state employees, to notify promptly and provide copies of all forms to REH. The data provided to REH by the various employing agencies serves as the source documents used to verify the requests (received by the Comptroller's Office) for reimbursement to the Unemployment Compensation Fund. Failure to provide copies of all forms to REH may result in improper payments.

The state's agent of record for all notices concerning Unemployment Compensation claims is:

R.E. Harrington, Inc.
P.O. Box 11874
Federal Square Station
Harrisburg, PA 17108-1874

PROCEDURES FOR REQUESTING A NEW PAYROLL DEDUCTION CODE

To request approval for a new payroll deduction, the form must be approved by the Commissioner of Labor, as prescribed by the Connecticut General Statutes, Section 31-71e(2).

Submit your request to the Commissioner of Labor and once approved, submit a copy to the Director of Central Payroll to assign a new payroll deduction code. A new payroll deduction code cannot be assigned without the approval of the Commissioner of Labor.

MILITARY LEAVE
(SECTION 5-248, 5-255 AND 27-33 OF THE GENERAL STATUTES)
FIELD TRAINING AND EXTENDED MILITARY LEAVE
FOR INDUCTIONS INTO SERVICE

  1. Field Training

    Section 5-248(c) of the Connecticut General Statutes provides that any full-time permanent employee in state service who is a member of the armed forces of the state or of any reserve component of the armed forces of the United States and is required to undergo field training, therein shall, for the period not exceeding three calendar weeks of such field training, be entitled to a leave of absence with pay, in addition to their annual vacation.

    An extension of military leave time is provided under Section No. 27-33 of the Connecticut General Statutes whereby an employee ordered to duty at the expiration of their field training, as evidenced by a copy of their special orders, shall receive additional time off with pay provided the period of absence in any calendar year shall not exceed thirty (30) days. No such employee shall be subjected, by reason of such absence, to any loss or reduction of vacation or holiday privileges.

  2. EXTENDED MILITARY LEAVE - SECTION 27-33 OF THE CONNECTICUT
    GENERAL STATUTES

DEDUCTION OF CREDIT UNION SAVINGS
(SEC. 5-261 OF THE CONNECTICUT GENERAL STATUTES)

  1. Section 5-261 of the Connecticut General Statutes provides that: "When, in the opinion of the Comptroller, a sufficient number of state employees who are members of a credit union organization of state employees' desires to have payroll deductions for credit union savings, the Comptroller may deduct from each such employee's salary such savings as such employee designates in accordance with the rules of such organization and the Comptroller shall remit the amounts so deducted to the treasurers of such organization."
  2. If there is any question regarding an organization's eligibility for payroll deductions, the agency payroll clerk must contact the Director of the Comptroller's Central Payroll Division at 566-1666 before starting any payroll deduction.

AUTO/HOME INSURANCE

Automobile and Homeowners Insurance is now available to all State of Connecticut employees through payroll deduction. Coverage is provided by Metropolitan Property and Casualty Insurance Company through their METPAY payroll deduction program. For policy information or a policy quote please call 1-800-541-8483. Kronholm & Keeler Associates, Inc., continues to be our program manager for this insurance coverage.

Employees should be informed that any contract agreement entered into between the employee and Metropolitan is solely the responsibility of the employee and the supplier. If a problem arises, the employee must first contact the insurance company. In extreme cases only, where a problem cannot be resolved and assistance is needed, should the agency contact Central Payroll on behalf of the employee. Written authorization from the employee must be obtained if any action is to be taken.

The applicable payroll codes for this deduction is D/OE 66, Sort Code 00187 which will be maintained by Metropolitan.

REIMBURSEMENT OF JURY FEE AND WITNESS FEE PAYMENT

  1. By the authority of the Commissioner of Administrative Service, the following regulations are prescribed for employees subject to jury duty, subpoena, or other order of the court.
    1. Upon receipt of proof of the necessity of jury service, time off with pay and without loss of earned leave time shall be granted on those days that the jury meets.
      1. If dismissed early or court is postponed, the employee will report to work immediately.
      2. If jury duty overlaps the employee's work schedule, the employee must report to work within a reasonable time.
    2. If an employee receives a subpoena or other order of the court requiring an appearance in court as a witness in their official capacity as an employee of the State of Connecticut, during regular working time, time off with pay and without loss of earned leave time shall be granted. This does not include court attendance which is voluntary or for which no subpoena was issued; nor does it apply to the plaintiff or defendant in a legal action.

      Any employee who is required to be on jury duty or to attend court pursuant to a subpoena or other order of the court must remit to the state such fees as are received for these services.

      1. Payments to jurors or witnesses may also include a travel allowance based on the rate specified by the Connecticut General Statutes (Sections 51-247 or 52-260). Should an employee use a state-owned automobile for transportation, the travel allowance must also be remitted to the state. If the employee provides their own transportation and does not request reimbursement from their employing agency, then the travel allowance is not to be remitted.
      2. Payments made specifically for meal allowances may be retained.
      3. This provision remains in force as long as the employee received full state salary while performing the above duties.

        If such fee is not remitted or waived, a like amount shall be deducted from the employee's pay for the period involved.

      4. All remittance of jury fees and witness fees (State Courts and Federal Courts) should be coded on deposit slip form CO-39, to Standard Revenue Accounts 3302, Jury Fees, and 3901, Witness fees, respectively. Any state employee called to jury duty or as a witness near the end of the calendar year should be requested to remit any fees received in December by the last working day in December. All remittances received in December should be deposited by the last work day of December.
      5. A memorandum of all jury fee and witness fee remittances should be sent to the Judicial Department, Accounting Section, Drawer N, State A, Hartford, CT 06106. The following information should be shown on this memorandum:
        1. Deposit slip number and date of deposit.
        2. Employee's name.
        3. Employee's social security or juror's identification
          number or name and location of court.
        4. Period covered by the payment being remitted.
        5. Amount of remittance.

        This information must be reported each calendar year to cover the period from January 1 to December 31.

      6. This memorandum will enable the Judicial Department to reduce the amount reported to the Internal Revenue Service as taxable income. Failure to remit these fees and notify the Judicial Department will result in the fees being reported to the Internal Revenue Service as taxable income of the recipient.
      7. All employees called to jury duty or to appear as witnesses in their official capacity as employees of the State of Connecticut should be informed of the requirement for remitting the fees received.

PAYROLL DEDUCTIONS FOR UNITED STATES SAVINGS BONDS

  1. State employees may purchase United States Series EE Savings Bonds (hereafter referred to as Bonds) through a payroll deduction plan. Employees who are considered the purchaser of Bonds should be informed of the following:
    1. Religious or charitable organizations or funds cannot be designated as owners, co-owners or beneficiaries on Bonds.
    2. Use of individual's first name is required on a Bond, whether as an owner, co-owner or beneficiary.
    3. Employees may designate any one individual as owner, co-owner or beneficiary on Bonds. It is not necessary that individuals designated be relatives of the employee.
    4. Only one Bond owner and co-owner or beneficiary can be designated by an employee.
    5. In accordance with a United States' Treasury Department directive, all Bonds issued on or after October 1, 1973, must indicate thereon the Social Security number of the individual in whose name the Bond is to be registered (Bond owner). Payroll deductions for the purpose of Bonds will not be permitted unless the required Social Security numbers are provided.

    NOTE: Parents or guardians may obtain Social Security numbers for minor children by applying at their nearest Social Security Office.

    1. Bonds will be dated the month in which the employee's salary is paid, (NOT EARNED) and the required purchase amount is completed.
    2. A United States' Treasury Department regulation requires that to use the title Ms. on a Bond, the Social Security number of the individual must also appear on the Bond. The system developed for issuing Bonds has not provision for printing the Social Security number of the co-owner or beneficiary, therefore the title Ms. may not be used with the co-owner's or beneficiary's name.
  2. FORMS

    Three different forms are used for Bond transactions, the type of transaction will determine the correct form to use. The types of transactions and forms to use are:

    Initial Authorization for Deduction

    Employee must complete a "Payroll Deduction Authorization - U.S. Savings Bonds," form CO-1003. All sections of the form must be completed and signed by the employee.

    Change to An Existing Authorization

    An employee desiring to change all or any part of an existing authorization for Bond deductions must complete a "Change in Authorization for Payroll Deductions - U.S. Savings Bond", form CO-679. All sections of the form must be completed and the type of change must be indicated.

    Termination of a Bond Deduction

    Any employee wishing to stop payroll deductions for Savings Bonds and be refunded any balance in their account must complete a "U.S. Savings Bond Deduction Termination and Refund Application", form CO-1003. Any balance in an employee's account will be refunded to the address indicated on the form.

    NOTE: No refund will be made unless this form is received from the employee.

    Specific Instructions

    The following instructions pertain to the CO-1003:

    1. All sections of the form must be complete.
    2. The agency name and two digit payroll identifier must be shown.
    3. Social Security number of the Bond owner must appear. The Social Security number of the co-owner or beneficiary is not mandatory but it is highly desirable.
    4. The names and addresses of the Bond owner and co-owner or beneficiary appear on the form as they are to be printed on the bonds.
    5. The deduction amount and maturity value of Bonds desired corresponds to the chart on the form.
    6. The form must be signed by the employee.
  3. Instructions to the Payroll Clerk.

    Refer to Procedures Manual - Chapter 3.

    NOTE: Employees on LAW or requesting temporary cancellation of deductions are not required to cancel their authorization.

    If the form is returned for correction, have the necessary corrections made and re-submit the form to the Comptroller's Central Payroll Division, again waiting for authorization to begin deductions.

    Any change of name on the payroll must be accompanied by a signed CO-1003 to effect the change on the Bond file. No Bonds can be issued in this situation until the change form is submitted.

    It is imperative that up-to-date mailing addresses are maintained for the mailing of Bonds. The Comptroller's Central Payroll Division should be notified promptly of changes of addresses by the employee's submission of a signed CO-1003 through their payroll office.

    Questions concerning Bonds should be directed to the Central Payroll Division at 566-5436.

MEMBERSHIP IN EMPLOYEE ORGANIZATIONS

All state employees must fall into one of two categories. Those who are covered by a collective bargaining agreement with an exclusive representative and those who are not represented or have no collective bargaining agreement.

In all cases, whether an employee is required to pay union dues or fees to an exclusive representative or not required because of no representation, only one payroll deduction for union dues/fees will be allowed. This provision must be strictly adhered to. When an exclusive representative has been designated, a payroll deduction will only be allowed for that representative (Section 5-280). An employee not represented may elect a single union dues deduction of their own choice according to the provisions of Section 5-260. Employees may voluntarily belong to other unions or associations but their dues payments must be made on a direct basis and not through payroll deduction.

  1. Employees who are not covered by a collective bargaining agreement shall have their membership in employee organizations governed by the provisions of Section 5-260 of the Connecticut General Statutes.
    1. Such deductions can be made only if the organization has been approved by the State Comptroller. If there is any question regarding an organization's eligibility for payroll deductions, the agency payroll clerk must contact the Director of Central Payroll, Office of the State Comptroller before starting any payroll deduction.
    2. Dues deductions will commence on the next payroll after receipt by the agency payroll clerk of a signed Authorization for Payroll Deduction of membership dues (forms are supplied by the organization). No form COP-6, Payroll Change Notice, is required unless the agency requires such a form for its own purposes.
    3. Section 5-260 provides, that in order to cancel such deduction that there be a written request thirty (30) days in advance.

      NOTE: All organizations which were qualified for payroll deductions prior to July 1, 1977 shall continue to be eligible except when specifically prohibited by a collective bargaining agreement or such eligibility for deduction is rescinded by the State Comptroller.

  2. Employees who are covered by a collective bargaining agreement shall have their membership in employee organizations governed by the provision of Sections 5-270 through 5-280 of the Connecticut General Statutes.
    1. Dues

      In all bargaining units covered by a contract, dues shall be deducted on payroll upon presentation of an authorization for dues deduction. The dues deduction will commence on the next payroll after receipt by the agency payroll clerk of a signed authorization.

    2. Service Fee

      In all bargaining units covered by a contract, a service fee will be applied to all employees in the unit who are not members of the exclusive representative.

      1. Written authorization to deduct a service fee is required only in the University of Connecticut Faculty and Professional Staff Bargaining Units.
      2. Service fee deductions on payroll are mandatory unless a waiver of payroll deduction of the service fee from the exclusive agent is on file in the payroll section at the agency. This includes those units where an alternate payment program for service fees are in effect.
      3. Confidential and Managerial Exclusions as listed by the Department of Administrative Services, Personnel Division are exempt from service fee deductions. These individuals and any other employees not covered by any collective bargaining agreement are still allowed to exercise their free choice to join or refrain from joining an employee organization but dues deductions are allowed for only one organization per employee. See the instructions concerning Section 5-260 above.
  3. Initiation of Service Fee Deduction

    Except where expressly modified by a collective bargaining agreement, employees must have a service fee deduction which is effective with the first payroll check received as a member of a bargaining unit. It is most important for the agency's staff to make themselves aware of the service fee provisions in the contracts which cover agency employees. The responsibility for the initiation of a service fee deduction rests with the payroll staff and not the employee.

  4. Changes

    All changes in the amount of membership dues and/or service fees deductions must first be certified to the State Comptroller by the representative union. Agency payroll personnel should make no changes until notified by the Comptroller's Office.

  5. Cumulative or Retroactive Deductions

    Under no circumstances are cumulative or retroactive deductions for union dues or service fees to be allowed on payroll. Any adjustments must be made directly between the exclusive representative and the employee.

  6. Dual Employment

    Any person who is employed in more than one position by the state, whether in the same or different agencies, shall be identified in the bargaining unit which contains the primary employment only. All other positions occupied shall be considered exempt.

  7. Provisional Employees

    Persons hired on a provisional basis into a permanent position (subject to examination) should be placed in the bargaining unit applicable to the job title of the employee. It is the position, not the person, which is covered by the bargaining contract. The start of a dues/fees deduction would be in accordance with the provisions of the applicable contract.

  8. Non-Status Employees

    Non-status employees such as temporary, emergency, seasonal or other non-permanent basis hires are not covered by the contracts and therefore no dues/fees deduction is required. All persons in this type of situation should be coded to the exempt classification. Note that these individuals may voluntarily elect to pay dues, but fees are not allowable.

INCREASE OF FEDERAL MINIMUM WAGE AND ITS IMPACT ON CGS 52-361a

  1. AUTHORITY
    1. . Public Law 104-188, an amendment to the Fair Labor Standards of 1989, enacted into law on August 20, 1996, increased the minimum wage from $4.75 an hour to $5.15 an hour, effective September 1, 1997.
    2. Public Act No. 87-196 codified in the Connecticut General Statutes as Section 52-361a, on Wage Garnishments, provides that:

      "(f) Amount subject to levy. The maximum part of the aggregate weekly earnings of an individual which may be subject under this section to levy or other withholding for payment of judgment is the lesser of (1) twenty-five percent of their disposable earnings for that week, or (2) the amount by which their disposable earnings for that week exceed forty times THE HIGHER OF (A) the (federal) minimum hourly wage prescribed by Section 6(a)(1) of the Fair Labor Standards Act of 1939, U.S.C. Title 29 Section 206(a)(1), or (B) THE FULL MINIMUM FAIR WAGE ESTABLISHED BY SUBSECTION (j) SECTION 31-58, in effect at the time the earning are payable."

    3. "Disposable Earnings" is the balance after the following deductions have been netted from gross wages: FICA, federal income tax, state income tax, normal retirement, union dues and fees, group life insurance, health insurance, maintenance, and (if applicable) voluntary or court-ordered family or welfare support, Federal tax levies, and/or state income tax deductions authorized pursuant to CGS Section 12-346.

      All other deductions (savings bonds, deferred compensation, etc.) are optional and are not permissible in the calculations of disposable earnings.

    4.  
      1. The federal minimum wage is currently $5.15 per hour.
      2. CGS 31-58(j) increased the minimum fair wage in Connecticut to $5.18 per hour, effective September 1, 1997.
  2. COMPUTATION TO DETERMINE AGGREGATE DISPOSABLE EARNINGS SUBJECT TO GARNISHMENT:

    Section 52-361a CGS, as amended by Public Act No. 87-196, provides that the maximum part of the aggregate disposable earnings subject to garnishment may not exceed the lesser of:

    1. 25% of the employee's disposable earnings for the week.
    2. The amount by which their disposable earnings exceed forty (40) times the Connecticut state minimum; i.e., 40 times $5.18 per hour equals $207.20 per week ($414.40 bi-weekly).
    3. The amount by which their disposable earnings exceed forty (40) times $5.15 per hour equals $206.00 per week ($412.00 bi-weekly).
    EXAMPLE:
    BI-WEEKLY AMOUNTS
    METHOD A METHOD B METHOD C
    GROSS WAGES $ 789.00 $ 789.00 $ 789.00
    Less: Allowable Deductions $ 237.00 $ 237.00 $ 237.00
    DISPOSABLE EARNINGS $ 552.00 $ 552.00 $ 552.00
    EXCLUSIONS:
    Method A:
    75% of Disposable Earnings 414.00
    Method B:
    80 times State Hourly Minimum ------------ 414.40
    Method C:
    80 times Federal Hourly Minimum ------------ ------------ 412.00
    AGGREGATE DISPOSABLE EARNINGS
    SUBJECT TO GARNISHMENT
    $ 138.00 $ 137.60 $ 140.00
    NOTE:
    Since it is the lesser aggregate disposable earnings which are subject to garnishment, the following rules-of-thumb will apply for current rates:
    DISPOSABLE EARNINGS
    $ 552.54 or more Use Method A
    $ 552.53 or less Use Method B
    Method C, based on Federal minimum wage, is reflected for comparison purposes only and will not be applicable as long as the Federal minimum wage is less than the state minimum.
  3. ASSISTANCE

    Please direct requests for assistance to the following:

    Payroll Procedures: Central Payroll Division
    860-702-3452 or 860-702-3454

PUBLIC ACT NO. 90-296
AN ACT CONCERNING DEPENDENT CARE SPENDING ACCOUNTS FOR STATE EMPLOYEES

In 1991, employees were offered the opportunity to establish an account that is to be used for the paying of expenses for dependent care. This program began on February 1, 1991 and the first payroll deduction was taken for the period February 8 through February 21, 1991 (check date March 8, 1991).

The money set aside in this account is excluded from employee's gross income, for income tax purposes. Information regarding this program, its establishment, administration, taxability, social security impact, retirement impact, etc., is provided separately by the Department of Administrative Services (DAS).

  1. EMPLOYEE'S DEDUCTION AUTHORIZATION
    1. Election Form

      An employee may authorize a payroll deduction for a dependent care assistance plan (DCAP) by completing an election form. The Third Party Administrator will supply the election forms to your employees. The employee's Agency Payroll Officer must be furnished with an election form, signed by the employee, which designates:

      1. Employee's Name and Address;
      2. Employee's Identification Number;
      3. Employee's Social Security Number;
      4. Employing Agency and Location (Level II);
      5. Dollar Amount of Bi-Weekly Deduction; and
      6. Effective Date of Action (must be at beginning of pay period)

      The employee's signed election form must be on file with the agency before deductions are initiated. This deduction must be for a fixed amount.

    2. Change Form

      Once an employee elects a deduction for a tax year, they cannot change or cancel that deduction unless there is a change in family status. For qualifying changes in a family status, please refer to the administrative information supplied by DAS. An employee requesting a change in the deduction amount for a DCAP must submit a Revision of Benefit Election and Change Form to the DCAP Plan Administrator. AN EMPLOYEE'S DCAP DEDUCTION MAY NOT BE CHANGED WITHOUT THE SUBMISSION AND ACCEPTANCE OF A CERTIFIED CHANGE FORM. This form will be approved by the DCAP Administrator and forwarded to the agency's payroll office to support the employee's change. The change in the employee's deduction amount will become effective prospectively. No retroactive adjustments will be made.

    3. Priority of Deduction

      If an employee's pay is inadequate to support all of the authorized deductions, the DCAP deduction will take priority over all other elective deductions.

  2. PAYROLL PROCEDURES

    Based upon the authorization referenced in Section I, the agency payroll staff are to process the employee's deduction request as follows:

    1. Forms - CO-1001 (Deductions/Earnings Maintenance Form):

      D/OE

      O

      MC

      PCT

      TYPE
      DOE
      AMOUNT
      SORT
      CODE
      7A 1 A N 0005000 = 00198
      $50.00
    2. On-Line - Screen 170

      D/OE

      O

      M

      P

      T
      AMT/PCT/TBL OTHER CD
      7A 1 A N 0005000 =$50.00 00198bb C
    3. Remote Job Entry - RK Transactions

      D/OE

      O

      M

      P

      T
      AMT/PCT/TBL OTHER CD
      7A 1 A N 0005000 =$50.00 00198bb C

      Once a deduction amount has been initiated, that amount cannot be changed unless there is a family status change. A family status change only affects future deductions.

  3. ASSISTANCE

    DCAP Administration:

    Policy: Department of Administrative Services, Management
    Relations - 566-2269

    Reimbursement Procedures: Third Party Administrator Colonial Life, Benefit America
    1-800-441-7044

    Payroll Procedures: Office of the State Comptroller

    Forms and On-Line: Central Payroll Division; 566-5428

    Remote Job Entry: Computer Services Division; 566-3214

    SECTION 61 OF THE INTERNAL REVENUE CODE
    TAXATION OF VEHICLES

    INDEX
    SECTIONS
    Preface Authority
    I State Vehicle Usage Policy
    II No Personal Use of Vehicles
    III Non-Business/Home-to-Office Use for Control
    Employees and Certain Other Employees
    1. Definition of Control Employees and
      Certain Others
    2. Eligibility Requirements
    3. Vehicle Usage Valuation
      1. Lease Value Method
      2. Vehicle Cents-per-Mile Method
    IV Commuting Use for Eligible Non-Control
    Employees
    1. Eligibility Requirements
    2. Commuting Valuation
    V Exceptions to Taxation
    VI Reporting Requirements
    1. Election of Valuation Method
    2. Monthly Usage Reports
    3. Vehicle Usage Fringe Benefit Computation
      Records
    4. Accounting Period
    VII Taxation and Preparation for Entry on Payroll
    1. Taxation
    2. Scheduling of Payroll Entry
    3. MSA Payroll Procedures
    VIII Election not to Withhold Taxes
    EXHIBITS
    1.  
      1. Qualified Non-Personal Use Vehicles
      2. Vans and Pickup Trucks - Eligibility
      3. "Law Enforcement Officer" Defined
    Forms
    1. Mileage Report (form CCP-40 Rev. 3/86)
    2. Computation forms
      1. Lease Value Method, form CO-961
      2. Cents-per-Mile Method, form CO-960
      3. Special Commuting, form CO-959

Effective January 1, 1986, Federal Public Law 99-44 (codified as Section 61 of the Internal Revenue Code) mandates that an employee's personal use of an employer-owned or leased vehicle must be reported to the Internal Revenue Service as taxable income. "Personal use" is defined as any non-business use, including commuting from an employee's home to their worksite. For purposes of these regulations, the term "vehicle" means, "any motorized wheeled vehicle manufactured primarily for use on public streets, roads and highways", and generally includes automobiles. Except for certain exceptions as set forth later, all State of Connecticut employees will be subject to taxation on any state vehicle use which is not documented as business use. State agencies will be responsible for implementing the applicable reporting requirements.

The Internal Revenue Service requires that one of several different vehicle-use policies be employed in establishing an employee's eligibility for certain "special rules" for valuation of the taxable fringe benefit. The following IRS requirements and other guidelines are set forth to assist agencies in determining those employees whose use of state vehicles is deemed taxable and in reporting the dollar value, by employee, of such benefits.

  1. STATE VEHICLE USE POLICY

    As stated by the three branches of government, the policy of the State of Connecticut basically prohibits use of State-owned/leased vehicles except for approved home-to-worksite travel as required by the employer.

  2. NO PERSONAL USE OF STATE VEHICLE

    Eligibility Requirements:

    To qualify for certain "specific rules" IRS Section 61 states that the employer's written policy statement of no personal use will qualify as sufficient evidence corroborating the employer's own statement if the following conditions are met:

    1. The vehicle must be owned or leased by the employer and be provided to one or more employees for use in the employer's trade or business;
    2. When the vehicle is not being used for business purposes, it must be kept on the employer's business premises except when it is temporarily located elsewhere (e.g., for repairs).
    3. Under the employer's written policy, no employee may use the vehicle for personal purposes other than de minimis use (e.g., a stop for lunch between two business appointments or deliveries);
    4. The employer must reasonably believe that no employee uses the vehicle other than de minimis use, for any personal purposes; and
    5. No employee using the vehicle lives at the employer's business premises.

      Note: Item 5 (preceding) does not apply to:

      1. employees living in state-owned housing on the grounds of the state-owned institutions; e.g., health care; and
      2. an employee who can document use of their home as an office, e.g., Protective Services home/office differential.

        In these cases, use of a state-owned vehicle for travel to and from a worksite may be treated as business use, i.e., not commuting.

  3. NON-BUSINESS/HOME-TO-OFFICE USE BY CONTROL EMPLOYEES AND CERTAIN OTHER EMPLOYEES
    1. Definition - Control Employee

      As used in this Federal Law, a "control employee" as applied by a government employer includes:

      1. an elected official; OR
      2. an employee whose compensation equals or exceeds the compensation paid to a Federal Government employee holding a position at Executive Level V; OR
      3. Certain Other Employees:

        The Fleet Operations Section of the Department of Administrative Services (DAS) advised that certain employees are allowed to use state-owned vehicles for non-business use additional to home-to-office travel, based on "past practice". Since the tax base will be the same as that for control employees, these "certain others" will hereinafter be referred to as "control employees". Instructions set forth for control employees will also be applicable to the "certain others".

    2. Eligibility Requirements:

      Even though the State of Connecticut has mandated no personal use of state vehicles except for commuting and possible de minimis personal use, the $1.50 one-way special commuting basis allowable for non-control employees is not available to those elected officials and others deemed to be a "control employee", as defined in the preceding Section III.A.

      Instead, either the "lease value" or the alternative "cents-per-mile" method must be elected to determine the benefit valuation (i.e., tax base). An agency may elect the lease value method or the vehicle cents-per-mile method for control employees. Such election should be carefully considered because once one of the valuation methods is elected, the employee must use it for all subsequent years unless the qualification rules are not met. All non-control employees must use the per diem commuting rate.

    3. Vehicle Use Valuation

      The valuations applicable to use of vehicles by control employees:

      1. Lease Value Method:
        1. After careful consideration of several IRS-allowable options in determining the fair market value (FMV) of our vehicles, the State of Connecticut has elected the "fleet average" basis. Simply stated, after reducing the State's total cost of all vehicles to reflect allowances for special equipment, if any, and depreciation, DAS Fleet Operations has determined that the average FMV of the State's fleet is $4,248 per vehicle. This FMV average will apply for the two-year period and will also be used as the FMV of additions to the fleet during that period. The State fleet FMV average of $4,248 equates to an annual lease value of $1,600, based on the Lease Value Schedule contained in the Internal Revenue Service Regulations.

        To determine the monthly and per diem lease value rates:

        Monthly Rate: ($1,600 */* 365) X Actual Number of Days of Continuous Use including Saturdays, Sundays and Holidays, e.g., for a 30-day month:

        ($1,600 */* 365) = $4.38 X 30 = $131.00

        Per Diem: The Per Diem rate is four times the annual lease value divided by 365 days, i.e.:

        ($1,600 */* 365) X 4 = $4.38 x 4 = $17.52

      Note:

      1. If the vehicle is used more than seven days in a month, it is advantageous to use the monthly rate rather than the per diem.
      2. It should also be recognized that a car is not treated as unavailable to an employee because the employee is on a personal vacation. Periods of continuous availability are only interrupted for bona fide business reasons.
        1. Gasoline, Maintenance and Insurance

          Maintenance and insurance are deemed included in the annual lease value. However, fuel, chauffeur service or any other service furnished by the employer (other than maintenance and insurance) must be separately included in computing the employee's gross income at a fair market value. Fuel must be included at the rate of 5.5 cents per mile for all miles driven.

        2. Once the preceding values are established, you then add lease value and fuel cost to determine total value of all miles driven.
        3. Exclusion for Business and Special Commuting Use: The employee may exclude all documented business and special commuting use by prorating the mileage attributable to the use components:
          1. Divide non-business miles by total miles to ascertain the percentage of non-business use.
          2. Multiply the total vehicle use valuation (lease value plus fuel, etc.) by the percentage attributable to non-business use to determine the fringe benefit value.

            Example:

            Employee A: Vehicle was driven a total of 3,000 miles in a month, of which 1,200 were documented as business use and 1,800 miles applied to Employee A's home-to-office travel. (Continuous availability to "A" for three weeks).

            Lease Values (monthly) $131.00
            Fuel (3,000 miles x $.055) $165.00
            Total Monthly Operating Cost $296.00

            1,800 miles\3,000 miles = 60% (non-business use)

            $296.00 x 60% = $177.60 (value of non-business use)

            Thus, the taxable benefit for Employee A is $177.60.

        4. Reimbursement to State for Vehicle Use: DAS Fleet Operations bills certain employees for vehicle use based on a predetermined monthly fees schedule. Such employees then make payment to Fleet Operations based on actual use. These employees must advise their respective Agency of the amount paid when payment is made to the state. The Agency business office can then reduce the taxable benefit by the reimbursement amount, up to the amount of the taxable benefit.
      1. Vehicle Cents-Per-Mile Method
        1. The standard mileage rate (currently 31.5 cents-per-mile for all miles) may be used to determine the benefit value of an employer-provided vehicle. This standard rate includes gasoline, insurance and maintenance. However, if gasoline is not supplied by the employer, the rate is currently 26 cents per mile. However, this alternative requires that:
          1. The fair market value of the vehicle does not exceed certain limits (presently $15,500); and
          2. The employer reasonably expects that the vehicle is used for government purposes and at least 50% of the miles placed on the vehicle during the year must be for government business; or
          3. The vehicle is used each workday to transport at least three employees to and from work in an employer-sponsored commuting vehicle pool; or
          4. The vehicle is driven at least 10,000 miles during a year and the use of the vehicle during one year is primarily by employees.

            Note: The IRS also requires that the annual 10,000 mile minimum be the result of consistent usage. For example, 2,000 miles on the vehicle in the first six months and then 8,000 miles during the second half of a year is not acceptable. If this occurs, lease value rates will apply rather than cents-per-mile.

            Example: If the cents-per-mile had been used in the preceding example with monthly mileage of 3,000 total miles (1,200 official business and 1,800 non- business), the calculation would be:

            1,800 miles x $.315 = $567.00 (Value of non-business use which is the taxable benefit to the employee)

        2. Reimbursement to State for Vehicle Use: Refer to instructions in the preceding Section III.C.1.(e).
        3. Computation Record

          See form CO-960 (Exhibit B.2.(b))

          Note: Shared Vehicle Usage

          The same valuation rule must be applied for each employee who shares a vehicle. The commutation value of the vehicle benefit is to be allocated among employees who share use of the vehicle, including the driver (unless the employee does not perform other services for the employer).

  4. COMMUTING USE FOR ELIGIBLE NON-CONTROL EMPLOYEES:
    1. Eligibility Requirements:

      The second type of written policy statement that will satisfy the employer's substantiation requirements, is one that prohibits personal use by the employee, except for commuting. To qualify under this rule, the following conditions must be satisfied:

      1. The vehicle must be owned or leased by the employer and be provided to one or more employees for use in connection with the employer's trade or business and be used in the employer's trade or business;
      2. For bona fide noncompensatory business reasons, the employer requires the employee to commute to and/or from work in the vehicle;
      3. The employer establishes a policy under which the employee may not use the vehicle for personal purposes, other than commuting or de minimis personal use (e.g., a stop for a personal errand between a business delivery and the employee's home);
      4. The employer reasonably believes that, except for de minimis use, the employee does not use the vehicle for any personal purpose other than commuting; and
      5. The employer accounts for the commuting use by including an appropriate amount in the employee's gross income.

      The above exception does not apply to an employee who is a "control employee". Further, for the exception to apply, there must be evidence that would enable the IRS to determine whether the use of the vehicle meets the five conditions listed above.

    2. Commuting Valuation
      1. Compliance with the foregoing requirements enables the state to apply the "commuting" valuation for all non-control employees using a State-owned vehicle for home to office (i.e., worksite) travel and who garages such vehicle overnight at their homes. IRS has set the per diem value of this commuting benefit at $1.50 each way (i.e., $3.00 round trip) for the driver and/or each passenger. This commuting rate applies regardless of mileage; i.e., same per trip amount for two miles as for two hundred.
      2. Computation: Multiply the number of round trip commutes by $3 to determine the employee's taxable fringe benefit. Count one-way trips as 1/2 trip.

        Example: Employee commuted in a state-owned vehicle for eleven working days, but used vehicle only one-way on three of those days.

        9 1/2 R.T.'s X $3 = $28.50 Taxable Fringe Benefit

      3. Reimbursement to State for Vehicle Use:

        Refer to instructions in the preceding Section III.C.1.(e).

      4. Computation Record:

        See form CO-959 [Exhibit B.2.(c)]

        Note: Form CO-959 should also be used for those employees subject to taxation on benefits derived as passengers who commute in state-owned vehicles. In such instances, the passengers will inform their employing agency monthly by written memorandum of the number of pertinent commuting trips.

  5. EXCEPTIONS (APPLICABLE TO ELIGIBLE CONTROL AND NON-CONTROL EMPLOYEES

    Our review of the pertinent IRS regulation indicates that the following categories of vehicle use are not presently subject to taxation:

    1. Qualified Non-personal Use Vehicle:

      The term "qualified non-personal use vehicle" is applied to any vehicle that, by reason of its nature, is not likely to be used more than a very limited (i.e., de minimis) amount for personal purposes.

      Refer to Exhibit A.1 for a listing of "qualified non-personal use vehicles" that fall within this exception, together with explanatory information relative to the exception requirements for vans and trucks, Exhibit A.2, and the narrowly-defined requirements for "law enforcement officers", Exhibit A.3.

    2. Overnight Parking ("Garaging") of Vehicle at Approved State-Owned or Leased Facility

      The Legislation and Regulations Division of the Office of Chief Counsel, Internal Revenue Service, advised that taxation would not apply if an employee used an approved state-owned or leased facility for the overnight "garaging" of an assigned state vehicle even though such facility was some distance from employee's worksite and possibly close to their home. However, this exception was qualified by three stipulations: (a) vehicle usage and parking location must make "good business sense" to the employer; (b) overnight parking location must be approved by employer; and (c) if the driver transports one or more passenger from their home(s) to worksite, such passengers are subject to taxation on the derived benefits.

    3. De Minimis Use of Vehicle:

      The regulations state:

      1. In general, gross income does not include the value of a de minimis fringe provided to an employee. The term 'de minimis fringe' means any property or service the value of which is (after taking into account the frequency with which similar fringes are provided by the employer to the employer's employees) so small as to make accounting for it unreasonable or administratively impractical."

        The following is subsequently set forth under "Examples":

        (f) (2): "Benefits not excludable as de minimis fringes. Examples of fringes benefits that are not excludable from income as de minimis fringes are: ...the commuting use of an employer-provided automobile or other vehicle more than once a month; ..."

        Therefore, it appears that an employee's once-a-month vehicle use need not be reported as a compensatory benefit subject to taxation. However, regulations further state that, if either the value or the frequency of use exceeds the limits provided, no amount of the benefit is considered de minimis.

    4. If a replacement vehicle (loaner) is furnished for temporary use while an assigned vehicle is being serviced or repaired, a monthly lease value computation should be based only on the assigned vehicle (plus fuel cost); i.e., it is not necessary to add extra per diem value for the "loaner".
    5. Commuting to a Temporary Work Location (IRS Ruling 90-23)

      Commuting to a temporary work location is a deductible business expense, under Section 162 of IRC, provided certain conditions are met. Working condition deductible business expenses are excludable from an employee's gross income.

      To qualify for an exclusion, an employee must have one or more regular work locations but must be going from their residence to a temporary work location. This ruling defines:

      1. Regular Work Location - Any location at which the employee works or performs services on a regular basis. Trips to a regular work location are not deductible as a business expense. An employee may be considered as working or performing services at a particular location on a regular basis whether or not the employee works or performs services at that location every week on a set schedule.
      2. Temporary Work Location - Any location at which the employee performs services on an irregular or short-term, which is generally a matter of days/weeks, basis.

      Employees commuting in a state vehicle should not report as a vehicle use fringe benefit commuting miles to a temporary work location as defined above.

  6. REPORTING REQUIREMENT
    1. Election of Valuation Method:

      Each agency should elect the valuation method to be used, by employee, based upon whether the employee is a "control" or "non-control" employee.

      Agencies must also maintain the records necessary to properly substantiate the dollar value of the vehicle-use benefit for the period November 1, through October 31, of each year (special accounting period).

    2. Monthly Usage Reports:
      1. Revised Form CCP-40:

        In accordance with Standard State Travel Regulations, employees must continue to submit Monthly Usage Reports (form CCP-40), (Exhibit "B"). This form provides for the allocation of mileage to "official business" and/or to "nonbusiness/home-to-office/special commuting".

      2. To ensure compliance with IRS regulations, agencies must require that employees using state-owned vehicles promptly submit accurate, fully completed Monthly Usage Reports. Both control and non-control employees must now complete all sections of the form CCP-40, Rev. 3/86. Adherence to full completion of this form (thereby documenting all vehicle usage) applies to all employee-users, including employees who reimburse the state for home-to-office travel.
    3. Vehicle Usage Fringe Benefit Computation Records
      1. Exhibits are:
        1. ) - Computation Record for Lease Value Method (form CO-961);
        2. ) - Computation Record for Cents-per-Mile Method (form CO-960); and
        3. ) - Computation Record for Special Commuting Method (form CO-959)

          Photocopy sufficient copies of the applicable forms for one per vehicle user and complete the top section of the record. Agency needs will vary depending upon the agency's election methods for control employees.

      2. From the information reported on the CCP-40, the agency will then post data as needed, from the Usage Report to the Employee's Computation Record.
      3. Adhere to instructions on the Computation Record in calculating the monthly value of the fringe benefit.
      4. Employee-User Reimbursements to the State:
        1. DAS Fleet Operations will continue to bill those employees who are required to reimburse the state for use of a state-owned vehicle.
        2. The employee should report such payment amounts to their Business Office.
        3. The agency will then credit the reimbursement (up to the fringe benefit assessment) received on the Employee's Computation Record, thereby decreasing the Fringe Benefit amount.
        4. Upon request from the employing agency, DAS Fleet Operations will advise the amount that has been received to date from an employee-user.
    4. The accounting period for the calendar year fringe benefit reporting is for the period November 1 through October 31. Retain the Computation Record and the documenting CCP-40 for the later of (a) four years; or (b) until examination by the Auditors of Public Accounts. These records serve as the basis for the following payroll transactions:
      1. Additions of the non-cash fringe benefit amounts to the employee's taxable compensation; and
      2. Payroll deduction of the applicable FICA amounts.
  7. TAXATION AND PREPARATION FOR ENTRY ON PAYROLL
    1. Taxation

      The current year's Vehicle Use Fringe Benefit amounts are to be entered on the Payroll as "Motor Vehicle Usage". Such compensation will not be reflected in Net Pay. However, this is IRS-reportable income and will be subject to Social Security and Federal Income Taxes.

      1. Federal Income Tax - No withholding tax applying to the fringe benefits compensation will be deducted. Agencies should inform those employees whose use of state vehicles results in taxable fringe benefits that the additional earnings will be reflected on their IRS Form W-2 and State of Connecticut Form CT-W2. It may be advisable for some such employees to recompute their yearly earnings information, taking into consideration the fringe benefit income.
      2. Social Security Tax - As required by Federal Law, FICA tax on the fringe benefit compensation must be deducted from all covered employees at the applicable rate; i.e., either full Social Security Coverage or "Medicare only".
    2. Scheduling of Payroll Entry

      Payroll is to be scheduled every three months. From the last day of the quarter in which the vehicle is used until the scheduled payroll entry date, approximately thirty days are allowed for the employee's submission of the third month's motor vehicle report and for the agency's computation of the taxable fringe benefit amount: i.e., the amount to be entered as "motor vehicle usage" on the payroll.

      - Termination of Employee - If an employee retires or otherwise terminates employment, the dollar value of vehicle use to date of termination should be computed immediately. Such fringe benefit amount(s) should be reflected on the employee's last paycheck.

    3. MSA Payroll Procedures
      1. Forms

        Prepare a form CO-1004, Time Card Entry. Enter Payroll Unit, Period Ending Date (e.g., 92/09/10), Employee Number, Transaction Code 1, Vehicle Usage Amount in dollars and cents in the Salary Amount field with leading zeros (e.g., 0010000 = $100.00), D/OE Code 02 in D/OE field.

        Example:

      Employee No.     Trans. Code     Salary Amount     D/OE Code     
      0000654321     1     0010000     02
      1. On-Line Time-Card Entry
        1. Screen 381 (Individual Employee):

          Enter State (Level 1), Payroll Unit (Level 2), Employee Number, Transaction Code 1, Vehicle Usage Amount in the Rate or Amount field with leading zeros (e.g., 0010000 = $100.00), D/OE Code 02 in the D/OE Code field.

          Example:

               

           

           

           Regular Rate

           

         Employee No.   

           Trans. Code   

           or Amount   

           D/OE Code  

          0000543216   

         1   

          0010000   

          02 


        1. Screen 382 (More than One Employee) - Optional:

          See Screen 381 instructions.

      2. Remote Job Entry (RJE):

        Generate a ZT transaction with the following information:

        Enter State (Level 1), Payroll Unit (Level 2), Employee Number, Transaction Code 1, Vehicle Usage Amount in the Salary Amount field with leading zeros (e.g., 0010000 = $100.00), D/OE Code 02 in the D/OE Code field.

        Example:


        1.    

          Record

          Position:   

           1-2   

            3-4   

             5-6   

           7-16   

            17-18   

            24-30   

             44-45

          ZT  CT  Level 
          2
          Employee
           Number
          Time Entry
          Trans Code 
          Salary
          Amount 
          D/OE
          Code
          Example: ZT CT Payroll Unit 0000654321 R1 0010000 02

                      

    VIII. Election on Not to Withhold

    The State of Connecticut will continue its election not to withhold income and employment taxes, other than social security, on the imputed value of an employee's nonbusiness use of an employer-related vehicle.

    Each agency must notify its employees of the state's decision to not withhold federal and state income tax on the vehicle use benefit. In your notification to agency employees, inclusion of the following information is recommended:

    "Personal use of a nonexempt state vehicle by state employee(s) for commuting or other nonbusiness purposes must be considered taxable compensation and reported on the employee's Form W-2. Although the state does not withhold income and employment taxes, employee(s) will still be incurring a tax liability. The payment of this tax liability may be postponed until the employee's return is filed. However, employees should recognize that 90% of their tax liability must be paid in advance through deductions from earnings (i.e., withholding) and/or periodic payment of estimated taxes. It is the employee's responsibility to seek tax counseling, if needed, insofar as increasing tax payments by revisions to their Form W-4 and CT W-4 and/or estimated taxes."

EXHIBIT A

A.1

QUALIFIED NON-PERSONAL USE VEHICLES:

For years beginning after 1985, any vehicle that, by reason of its nature, is not likely to be used for more than a very limited (i.e., de minimis) amount for personal purposes is exempt from substantiation requirements generally imposed on employer provided cars. The term "qualified non-personal use vehicle" is applied to these types of vehicles. However, an employer's deductions related to the business use of such vehicles must still be justified under the general rules applicable to other types of business expenses.

Examples of "qualified non-personal use vehicles" that fall within this exception are:

  1. forklifts;
  2. cement mixers;
  3. dump trucks;
  4. garbage trucks;
  5. refrigerated trucks;
  6. tractors and other special purpose farm vehicles;
  7. combines;
  8. flatbed trucks;
  9. bucket trucks ("cherry pickers")
  10. delivery trucks with seating only for the driver, including those with a jump seat;
  11. any vehicle designed to carry cargo with a loaded gross weight over 14,000 pounds;
  12. cranes and derricks;
  13. school buses, ambulances and hearses used as such;
  14. clearly marked police and fire vehicles, but personal use other than commuting must be prohibited by the employer;
  15. unmarked law enforcement vehicles, but personal use must be incident to the employee's law enforcement functions (e.g., the ability to respond to emergency situations or report directly to a surveillance site) (see Law Enforcement Officer A.3", next page);
  16. passenger buses used as such with a capacity of at least 20 passengers;
  17. moving vans used by professional moving companies, but personal use must be restricted by the employer; and
  18. trucks specially designed to carry and store equipment for emergency utility repairs (e.g., restoring or maintaining electricity, gas or water utility services).

A.2

VANS AND PICKUP TRUCKS

Vans and pickup trucks are not automatically classified as exempt vehicles because they can be easily used for personal purposes. However, if a van or pickup truck has been specially modified with the result that is not likely to be used more than de minimis amount for personal purposes, it will be classified as "qualified non-personal use vehicle" and exempt from the substantiation requirements. For example, a van that has only a bench for seating in which permanent shelving has been installed, that constantly carries merchandise and that has been specially painted with advertising or the company's name will qualify as a vehicle not susceptible to personal use.

A.3

LAW ENFORCEMENT OFFICER

In order for an unmarked police vehicle (see number 15 on preceding page) to be classified as a qualified non-personal use vehicle, it must be used by a law enforcement officer.

A "law enforcement officer" is an individual who is a full-time employee of a governmental unit that is responsible for the prevention or investigation of crime. In addition, the employee must be authorized by law to carry firearms, execute search warrants and make arrests. The employee must regularly carry firearms, except when it is not possible to do so due to the requirements of undercover work.

An arson investigator may be considered a "law enforcement officer" while an IRS special agent may not be.


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