[Code of Federal Regulations]
[Title 26, Volume 2]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.120-1]

[Page 500-501]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.120-1  Statutory subsistence allowance received by police.

    (a) Section 120 excludes from the gross income of an individual 
employed as a police official by a State, Territory, or possession of 
the United

[[Page 501]]

States, by any of their political subdivisions, or by the District of 
Columbia, any amount received as a statutory subsistence allowance to 
the extent that such allowance does not exceed $5 per day. For purposes 
of this section, the term ``statutory subsistence allowance'' means an 
amount which is designated as a subsistence allowance under the laws of 
a State, a Territory, or a possession of the United States, any 
political subdivision of any of the foregoing, or the District of 
Columbia and which is paid to an individual who is employed as a police 
official of such governmental unit. A subsistence allowance paid to a 
police official by any of the foregoing governmental units which is not 
so provided by statute may not be excluded from gross income under the 
provisions of section 120. The term ``police official'' includes an 
employee of any of the foregoing governmental units who has police 
duties, such as a sheriff, a detective, a policeman, or a State police 
trooper, however designated.
    (b) The exclusion provided by section 120 is to be computed on a 
daily basis, that is, for each day for which the statutory allowance is 
paid. If the statute providing the allowance does not specify the daily 
amount of such allowance, the allowance shall be converted to a daily 
basis for the purpose of applying the limitation provided herein. For 
example, if a State statute provides for a weekly subsistence allowance, 
the daily amount is to be determined by dividing the weekly amount by 
the number of days for which the allowance is paid. Thus, if a State 
trooper receives a weekly statutory subsistence allowance of $40 would 
be $8, that is, $40 divided by 5 for 5 days of the week, the daily 
amount would be $8, that is, $40 divided by 5. However, for purposes of 
this section, only $5 per day may be excluded, or $25 on a weekly basis.
    (c) Expenses in respect of which the allowance under section 120 is 
paid may not be deducted under any provision of the income tax laws 
except to the extent that (1) such expenses exceed the amount of the 
exclusion, and (2) the excess is otherwise allowable as a deduction. For 
example, if a State statute provides a subsistence allowance of $3 per 
day and the taxpayer, a state trooper, incurs expenditures of $4.50 for 
meals while away from home overnight on official police duties only $3 
would be excludable under this section. Expenses relating to such 
exclusion ($3) may not be deducted under any provision of the income tax 
laws. However, the remaining $1.50 may be an allowable deduction under 
section 162 as traveling expenses while away from home in the 
performance of official duties. See Sec. 1.162-2.
    (d) In the case of taxable years ending after September 30, 1958, 
section 120 and this section do not apply to amounts received as a 
statutory subsistence allowance for any day after September 30, 1958.