Update on Fiscal Cliff Commuter Tax Benefits - January 17, 2013


On January 4 and 14, we blogged about the American Taxpayer Relief Act of 2012’s (ATRA) increases in the pre-tax contribution that commuters may make towards van pools as well as transit passes.

Prior to the enactment of ATRA, the maximum pre-tax contribution for these modes of transportation was $125 for 2012 and 2013.  ATRA increased this amount for 2012 to $240 and for 2013 to $245.

On January 16, the IRS issued Notice 2013-8, establishing special administrative procedures for employers to reimburse employees for taxes paid on transit expenses between $125 and $240 paid during 2012.  The Notice also offers instructions on how to adjust Forms 941 and W-2.  Employers are urged to consult with their payroll providers in order to determine how Notice 2013-8 applies to them.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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