Qualified Transportation Fringe Benefits Summary Table
Qualified transportation fringe benefits (Section 132(f) of the Internal Revenue Code) or “Commuter Tax Benefits” are like money in the bank. Employers save on payroll related taxes. Employees save on federal income taxes.
On December 19, 2014, President Obama signed into law H.R. 5771, the Tax Increase Prevention Act of 2014, which extends retroactively through December 31, 2014 the qualified transportation fringe benefit levels. The result is that the exclusion amount for 2014, parking, transit and commuter highway vehicles were $250 per month. Prior to that law, transit and commuter highway vehicles were limited to $130 per month.
However, according to IRS Rev. Proc. 2014-61, “For taxable years beginning in 2015, the monthly limitation under § 132(f)(2)(A) regarding the aggregate fringe benefit exclusion amount for transportation in a commuter highway vehicle and any transit pass is $130. The monthly limitation under § 132(f)(2)(B) regarding the fringe benefit exclusion amount for qualified parking is $250.” Source: www.irs.gov/pub/irs-drop/rp-14-61.pdf
Commuters can receive both the transit and parking benefits (i.e., up to $380 per month). Employers can allow employees to use pretax dollars to pay for transit passes, vanpool fares and parking but not for bicycle benefits.
Employers that subsidize at least $30 per month for transit or vanpool fares may meet the National Standard of Excellence and qualify for designation under NCTR’s Best Workplaces for Commuters.
Read over 35 Frequently Asked Questions, including questions about the bicycle commute option, in our National TDM and Telework Clearinghouse/Best Workplaces for Commuters‘ Support Center for more details about Commuter Tax Benefits.
The following summary was prepared to concisely but generally explain qualified transportation fringe benefits. However, there are exceptions (e.g., partners, 2% owners in S-corps) so you should check with your tax adviser to meet your particular circumstances. For definitions of terms, click on the URLs in the table, including the headers.
*** tax free transit and vanpool benefit limit decreased from $250 per month in 2014 to $130 per month beginning January 1, 2015
**** tax free parking benefit limit remains at $250 per month beginning January 1, 2015.
Qualified bicycle commuting month.
.Reasonable expenses include: The purchase of a bicycle and Bicycle improvements,repair, and storage. These are considered reasonable expenses as long as the bicycle is regularly used for travel between the employee’s residence and place of employment.
- IRS Final Rule on Section 132(f) (pdf)
- Frequently Asked Questions
- Executive Order 13150 Federal Workforce Transportation
- VA Transit Benefit Program guidelines
- Bureau of Labor Statistics 2010 National Compensation Survey – Civilian Populationshows percent of workforce with subsidized commuting benefits
- US Dept of Agriculture Commute Transit Subsidy Benefit Directive