IRS Issues New 2012 Limits on Transportation Benefits
Posted: December 2, 2011
Employers have a new set of limits to go by when helping workers with the cost of their daily commutes. For employees, there is some good news and some bad news.
The monthly limit on the amount of parking benefits that can be excluded from employees' income for tax purposes becomes $240. This is up ten dollars from 2011.
Concerning commuters and transit passes, employees will likely not be too excited. The monthly benefit given to those commuting in a highway vehicle or purchasing transit passes is capped at $125. This is a drastic change from the 2011 allotment of $230 per month. In February of 2009, Congress enacted the American Recovery and Reinvestment Act of 2009 (ARRA). The ARRA increased the cap on the monthly benefits from $120 through the end of 2010. The Tax Relief and Job Creation Act of 2010 extended this provision through 2011. Starting this January, the exclusion reverts to the previous limit of $120, adjusted for inflation to $125.
The annual limit on bicycle commuting benefits in 2012 is capped at $20 multiplied by the number of qualified bicycle commuting months during the year.
Want to know more? Read the full article by Christian Schappel at HR Morning