Tax-Free Commuter Benefits Restored and Increased
As part of the fiscal cliff deal, the federal government restored the tax-free transit benefit and increased the overall commuter tax benefits for transit and parking—up to $250 per month for transit benefits and up to $240 per month for parking benefits for 2013. Commuter tax benefits for transit and parking are tax-free by federal government and can help cover the costs of workers’ commutes. It is estimated that 2.7 million families will benefit from this tax break.
As of January 1, 2013, an employer may provide up to $250 per month per employee ($2,940 per year) towards commuting by public transportation or vanpool (“transit benefit”). For 2012, the government retroactively increased the maximum amount for transit benefits from $125 per month per employee ($1,500 per year) to $240 per month per employee ($2,880 per year).
The tax-free benefit for parking, as of January 1, 2013, is up to $240 per month ($2,880 per year) for qualified parking. Qualified parking is defined as parking at or near an employer's worksite, or at a facility from which employee commutes via transit, vanpool or carpool.
Commuters can receive both the transit and parking benefits (up to $480 per month/$5,760 per year). The maximum limits are adjusted annually for inflation. For more information, please contact your Trust Fund counsel.
By Linda Baldwin Jones