Employer Provided Housing

IRC, Title 26, Section 119(d) provides an exception from taxable income for employees of educational institutions who are provided qualified campus housing, which is defined as lodging provided to the employee, spouse or a dependent by or on behalf of the institution for use as a home located on or near campus. In contrast to other employer-provided housing, campus housing does not have to be furnished for the convenience of the employer or as a condition of employment in order to be excluded from wages. 

In general, the value of residential housing furnished by a school to one of its employees is excludable from wages, provided the housing is located on or near campus and the employee pays rent during the calendar year that equals or exceeds 5% of the fair market value of the housing.

If the employee does not pay rent equal to at least 5% of the housing's fair market value, then the difference between the rent paid and the lesser of (1) 5% of the fair market value of the housing and (2) the average rental paid by individuals (other than students or employees) for comparable housing provided by the school is includable in the employee's taxable wages.