Pass Travel Costs on United
LAST Updated 5/23/2019 Most information here is still correct; but some links may not work.
1) Retirees must pre-pay any service charges, departure taxes, and customs fees when listing. Visit employeeRES > Quick Links > Pass Calculator to see a cost breakdown of each segment.
NOTE: Departure taxes leaving Belize, Colombia, Honduras & Panama may have to be paid to a United rep at the airport
2) Retirees will pay withholding on Imputed taxes, if applicable, quarterly via invoice to United Airlines.
Info and examples of service charges and imputed taxes are here:
1) Service Charges
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Costs when using a VACATION PASS:
ALL retirees and their eligible pass riders fly "service charge waived" in all cabins system-wide. That means FREE! However, any applicable departure taxes, customs fees, etc. must be pre-paid.
Costs when using a PERSONAL PASS:
Retirees with 25+ years of service fly "service charge waived" in all cabins system-wide! Ditto for their eligible pass riders (whether accompanied or not); sweet deal. But, on many flights there are departure taxes, customs fees, etc. everyone must pay.
Retirees with less than 25 years of service fly "service charge waived" system-wide in Economy; however, they pay service charges for premium cabins (Polaris Business, Premium Plus) system-wide; (plus any departure taxes, fees, etc). Ditto for their eligible pass riders (whether accompanied or not). Applicable service charges are 90% OFF ZED fares on domestic flights, 75% OFF ZED fares on international Premium Plus and 50% OFF ZED fares on international Polaris Business flights.
Retirees must Pre-pay with credit card (employees pay via payroll deduction):
employeeRES requires retirees listing for flights pre-pay with a credit card, unless the trip is completely free. It will show the amount owed and you should WRITE IT DOWN! When you pay with your credit card the cost changes to "0" and your email receipt says “0”. To see a breakdown of costs, taxes, etc. click on the little blue “i” button, on the top right of the payment page. For security, employeeRES will not remember your credit card number, you must input it every time.
If listing with the United app, your credit card will be charged before listing is completed.
REFUNDS:
If your plans change, CANCEL your listing in employeeRES before departure time and your credit card may be refunded automatically. You should be refunded all service charges, departure taxes, customs fees paid. If you cancel after flight departure you will have to request a refund. If you list in a premium cabin and it's full, you should be automatically boarded in lower cabins; if you paid for a premium cabin, your cc may not be automatically credited, so keep your boarding pass!
Write down your employeeRES payments & track your credit card charges.
More information, go to FT > Travel > Top Hits > Get a refund
2) Imputed Taxes and "Pass Travel Withholding Taxes"
IMPUTED TAX REPORTING AND COLLECTION changed effective 11/1/2017.
See this article: https://ft.ual.com/travel/w2passtraveltaxreporting
If you already know about imputed taxes, Scroll down to #3 to learn HOW to pay.
Background information: Before the new pass travel policy took effect in March 2012, United retirees may not have paid a lot of imputed taxes because service charges on that travel offset the taxes. Now, many pass riders fly “service charge waived” system-wide, so imputed taxes add up fast.
The U.S. government deems pass travel by certain pass riders as a “taxable benefit"; which triggers "imputed taxes". They accrue whenever your taxable pass riders use personal passes or vacation passes.
By law, United must keep track of each employee/retiree's "Pass Tax Value". If your "taxable pass riders" fly using your passes during the year then United will send you an invoice each quarter for withholding taxes you must pay. In January you will receive a W-2 form that reflects the total Pass Tax value and how much you paid in withholding during the last fiscal year. The W-2 will be reported to the IRS; you must declare it on your taxes.
What gets taxed? Pass travel by the retiree's "taxable pass riders": domestic partner, enrolled friends and non-dependent children after age 18 or 23 (if attending school). Employees also pay tax on buddy travel.
What does NOT get taxed? Pass Travel by "non-taxable pass riders": the retiree, spouse, parents and dependent children < 26 yrs old.
How is the "pass tax" computed? It is the ZED medium economy fare on every flight flown during the fiscal year by your taxable pass riders, minus any svc charges** paid.
NOTE: United's Fiscal Year is November 1st to October 31st. Departure taxes, customs fees, duties, etc. are not deducted from the pass tax; only service charges** paid can be deducted.
Example: Currently the ZED medium fare from SFO to KOA is $59 . If your taxable pass rider paid a service charge to sit in a premium cabin on that flight, then the Pass Tax value would be $59 minus the svc charge. If the svc charge was more than $59, then no imputed taxes would accrue.
To see the “pass tax value" per segment, go to employeeRES > Quick Links > Pass Calculator and fill in the segments (SFO-KOA=$59). The “Estimated Tax Withholding” amount displayed (SFO-KOA= $22.80) is a rough estimate of what employees would pay for that segment; retiree withholding will often be less.
ZED fares are based on mileage & can change every year.
For a current ZED fare chart on FlyingTogether, click HERE.
Who pays the IRS? YOU do (the retiree); not your pass riders. Scroll down to #3 to see HOW to pay.
For employees: "Estimated withholding taxes" are deducted from their paychecks based on the "pass tax values" that have accrued. When filing their tax returns, employees may not have to pay any additional taxes because they were already withheld during the year; this is reflected on their W-2 forms.
For retirees: "Estimated withholding taxes" are invoiced quarterly based on the "pass tax values” that have accrued. Retirees must pay the invoices to United. When filing tax returns, we may not have to pay any additional taxes because they were already withheld during the year; as reported on our W-2 form. The W-2 will show the total of all quarterly payments paid.
To make sure the amounts on the quarterly invoices and W-2 are correct, retirees should periodically view their Pass Travel Report by visiting FT > Travel > Pass Travel > "Pass travel report". Use the tiny arrows at the top of the report to view multiple pages. Click the small symbol at the top of the page to download a copy of the report in the format you desire (pdf, etc.). You will see where each of your pass riders flew by dates.
Adding up all the "Pass Tax Value" amounts on the left side of the Pass Travel Report should equal the amounts on your invoices and W-2. If they don't match, read on...
OOPS! Your Pass Travel Report amounts do not match your W--2?
The problem may be dates flown versus dates billed.
The taxable amount on your 2018 W-2 form was calculated from trips FLOWN between the dates of Nov 1, 2017 and October 31, 2018. Trips on the Pass Travel Report are displayed by dates BILLED.
If your W-2 amount is greater than the total Pass Tax Values on your Pass Travel Reports through October 2018, then check your Pass Travel Report for November and December 2018. Often trips FLOWN in mid or late October will show up on the Pass Travel Report in November or December.
Pay attention to the dates the trips were flown, not the dates those trips were billed.
Likewise, if your 2018 W-2 amount is less than your Pass Travel Report total, check your November 2017 report. There may be trips listed there that were actually flown in October 2017. Those trips may have been on your 2017 1099; they would not count toward your 2018 W-2 amount.
How much more (or less) will you have to pay the IRS due to "imputed taxes"?
That will depend on how much travel your taxable pass riders did, your applicable Federal and State tax rates, your tax bracket and your other income.
Generally speaking, the total amount you paid to United via quarterly invoices should offset any further tax liability to the IRS.
A more accurate estimating method is to complete your taxes including the W-2 imputed income and withholdings United sent you, then do your taxes again without the W-2. If you owe more tax when the W-2 is included, then add that difference to all the invoices you paid and that will equal what your pass riders’ travel actually cost you. Usually the total of all the invoices you paid to United will be very close to what your pass riders cost you for the year. Then you can either ask your pass riders for the $$$ ...or not.
Footnote:
** Service charges: Retirees with less than 25 years of service and their eligible pass riders pay service charges for pass travel in premium cabins. See the “Service Charges” link in FT>Travel>Policies>Overview>ServiceChrg.
3) HOW to PAY Pass Travel Withholding Taxes
When retirees accrue Pass Travel Taxes then United will send quarterly invoices by US Mail. Note: You can opt to have invoices delivered by email instead of US Mail. Here is the invoice schedule:
Pass Travel During Invoice Sent Payment Due
Nov-Jan March June 15
Feb-Apr June July 15
May-Jul September October 15
Aug-Oct December January 15
If your pass riders do not accrue Pass Travel Taxes you will not receive an invoice.
You must pay the invoices (via check or money order) by the due date or your pass travel privileges will be suspended.
You may now pay the invoices ONLINE via direct debit from your bank account (see message below).
View and pay Pass Travel Tax Invoices online by going to FT> Employee Services > Health&Insurance YBR.
Click the tile that says "View/Print invoices" to see your previous invoices.
Once your current invoice is loaded in the system you can see it on the tile "Pass Travel Tax Withholdings".
For detailed information, click the tile "Pass Travel Tax Withholdings Q&A"
Message from the ETC to retiree groups, April 2019:
I’ve got some good news to share! Beginning April 1st, retirees can now make online payments for their pass travel tax withholdings through the Your Benefits Resources (YBR) website. I’ve attached a user guide below that will help walk you through the easy process.
If paying online is not your thing, don’t worry you can still pay for your tax withholdings by check or money order. Please keep in mind, failure to pay an invoice may result in a suspension of your pass travel privileges until the invoice is paid.
Thank you for your continued support! Please share our good news about the online payments with your members.
Pay by check or money order:
- Make check or money order payable to United Airlines
- Be sure to write your account number 024510004 on your check or money order
- Always enclose the bottom portion of the invoice (coupon) with your payment
- Mail your payment to the address shown on the coupon
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- United Airlines, P O Box 3788, Carol Springs, IL 60132-3788
Online payment:
- Go to Flying Together > Employee Services > Health & Insurance (YBR)
- Click on the Pass Travel Tax Withholding tile
- Select the Pay Now tile on the right side of the page
- Follow the prompts in the Payment Center to submit your online payment
Helpful Resources:
- Visit our W-2 Pass Travel Tax Reporting page for a complete list of resources and tools
- Contact the Employee Travel Center:
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- Use Help Hub to submit an inquiry or
- Call 1-877-UAL-ESC9 (from the U.S.) or 1-847-UAL-ESC9 (outside the U.S.)
- Hours: 7:00 a.m. to 7:00 p.m. Central Time, 7 days a week
- Say "employee travel" then "travel questions" to speak to a team member
Thank you,
Employee Travel Center
CLICK HERE for Pass Travel Tax Online Payment USER GUIDE!
Compiled by Kirk Moore, RAFA Travel Benefits Committee
Last updated 5/23/2019