What
this legislation means for your company’s commuter benefit plans
Last month, President
Obama passed the Tax Prevention Act of 2014. Although it contains an array of
different tax provisions, this regulation will affect employers who offer
commuter transit benefits in particular. The transit
and parking pre-tax limits will be retroactively extended to the end of 2014
and set to $250/month limit for 2014 (NOT
the previous $130/month transit limit). This will not affect pre-tax
parking limits which were already set to $250/month.
According
to the IRS, employers can expect to see the pre-tax transit limits return to
$130/month in 2015. Parking limits will remain at $250 for 2015.
No
changes are necessary for employers, unless employees had elected post tax
deductions in amounts beyond the $130/month limit. If so, these deductions can now be revised to
be pre-tax. If employees had only
elected $130/month pre-tax, then no adjustments to their election are permitted
retroactively. This adjustment to the
2014 transit benefits will affect your employees’ pre-tax savings on their W-2
forms.
If you
have any questions regarding this legislation change, please feel free to contact
Ipswich Bay Advisors.
Thank
You.
