Does your company offer benefits to commuters who take a train or bus or ride in a vanpool to work? Under the American Taxpayer Relief Act (ATRA), the $125 monthly tax exclusion for employer-provided mass transit and vanpooling benefits has been hiked up to match the $240 monthly exclusion for parking fees, retroactive to Jan. 1, 2012.
But ATRA didn’t explain how employers should handle this retroactive increase for the 2012 tax year. Now the IRS has issued valuable guidance to employers. (IRS Notice 2013-8) The new guidance also allows a “simplified administrative procedure” for certain employers that treated excess transit benefits as taxable wages for 2012. Access more information here.