The company I work for has an employee renting a house to a temp employee. The company is paying the rent for the temporary employee. Should this be paid through payroll as a reimbursement to the employee that is receiving the rent payment?


In the situation as we understand it--the company is paying rent to an employee of the company--the company should pay the rent through accounts payable and report it on form 1099-MISC.

We confirmed this with IRS information reporting customer service agent Ms. O'Roke, ID#1006615, who said when an employee provides services outside of the realm of their job responsibilities, as in this case, then the company would issue both a W-2 (reporting their wages, etc. as an employee) and a 1099 (reporting rent payment to them, which is for services outside the realm of their employee responsibilities).

Have more questions? Submit a request