For 2015, you could provide employees with up to $130 a month in tax-free qualified mass transit benefits and up to $250 in qualified employer-provided parking. Until, that is, Congress upped the ante by equalizing both benefits at $250 a month, retroactive to the beginning of 2015.
Upshot: If you provided more than $130 a month in mass transit benefits during 2015 that “excess” benefit was legitimately taxable, but became nontaxable, as of January 2015. The IRS has now clarified how to deal with FICA adjustments for this excess benefit. (Notice 2016-6, IRB 2016-4)
FICA refunds only
Only adjustments for overwithheld FICA taxes may be made on your fourth-quarter Form 941 and employees’ W-2s. It’s too late to refund employees their overwithheld income taxes, since refunds of overwithheld income taxes had to be made by Dec. 31, 2015. Employees will get larger income tax refunds or owe less tax when they file their 2015 1040s.
O...(register to read more)