Heads up: Employers have a new set of limits to go by when helping workers with the cost of their daily commutes. One change should make employees happy. Another, not so much.
The IRS’ 2012 qualified transportation fringe benefits limits:
- Parking. This is the change that should have employees smiling. In 2012, the monthly limit on the amount of parking benefits that can be excluded from employees’ income for tax purposes becomes $240 (up from $230 in 2011).
- Commuter vehicles and transit passes. Employees won’t be so crazy about this change. In 2012, the monthly benefit given to those commuting in a highway vehicle/purchasing transit passes is capped at $125 (down from $230). Under the American Recovery and Reinvestment Act (ARRA), the monthly limit for these benefits was increased to $230 through Dec. 31, 2010. Then the Tax Relief and Job Creation Act of 2010 extended this provision through Dec. 31, 2011. But starting this January, the exclusion reverts to the previous limit of $120, adjusted for inflation to $125.
- Bicycle commuting reimbursement. 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.
Employees may receive these benefits simultaneously.