My small business paid rent on behalf of employee. Who do I expense the income too? Landlord or employee?

Question

I had intended to 1099 the landlord but was informed I need to expense this as employee compensation instead of rental expense. But, do I still 1099 the landlord if I put it on employee W-2.

Answer 1

If it's part of the employees pay - then 1099 the employee.  If it's just a business expense, then you 1099 nobody.  Under no circumstances does the landlord get a 1099 for rent paid.

Answer 2

It depends on why you were paying it.  Was it a benefit paid for his normal housing or a expense paid because he was temporarily relocated to a non permanent home for the benefit of the business.

If it was rent for his normal home then it is income and should be reported as income paid.  If it was rent for a temporary relocation then it should be treated as an expense (just like paying hotel bills for a business trip).