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Take a tax-free ride to work

by on
in Employee Benefits Program,Human Resources

The qualified transportation fringe benefits provided by a company to its employees are exempt from federal income tax. For instance, a company may offer mass transit passes or vanpooling services to its workforce. As long as the payments or reimbursements don’t exceed the monthly limits established by the IRS, no tax is due.

Good news: The bailout law creates a new transportation fringe benefit for using old-fashioned muscle power.

Effective for tax years beginning after 2008, an employer can pay employees up to $20 per month tax-free for commuting by bicycle. The payments cover reasonable expenses for this purpose such as bicycle purchases, other equipment purchases, repairs and storage.

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