PUCC stands for Personal Use of Company Car, which refers to the use of a company vehicle for personal reasons by an employee. The IRS considers PUCC a taxable noncash fringe benefit, which means that the value of using the vehicle for personal reasons must be included in the employees income and withheld for taxes. The value of PUCC can be calculated using different methods, such as the cents-per-mile rule, commuting rule, and leased value rule. PUCC includes activities such as commuting to and from work, running personal errands, vacation or weekend use, and use by a spouse or dependent. If an employee uses the company car strictly for business purposes, the usage is considered a working condition fringe benefit, and the value of using the vehicle is not included in the employees income or taxed.

To handle reporting personal use of a company car for wage and tax purposes, employers need to calculate the value of PUCC and include it in the employees compensation for tax purposes. The PUCC amount is taxable across all payroll tax types, including Federal withholding, Social Security, Medicare, and State withholding. It is ideal to have the PUCC amount calculated before the final payment of wages for the calendar year to provide an employee sufficient other earnings to offset the tax due. PUCC amounts should report directly in Box 14 and in taxable wages in Boxes 1, 3, 5, 14, and 16.

In summary, PUCC refers to the personal use of a company vehicle by an employee, which is a taxable noncash fringe benefit that must be included in the employees income and withheld for taxes. The value of PUCC can be calculated using different methods, and it is important for employers to handle reporting personal use of a company car for wage and tax purposes.