Pre-tax mass transit benefits set to $240 from $125.
In a last minute scramble to avoid the ‘fiscal cliff’ with a Mass Transit Benefits Increase, the Senate and House passed a bill, and President Obama signed into law on January 2, 2013, which prevents tax rates from increasing for most Americans. In addition to the widely discussed tax rate provisions, the bill also includes an extension of the parity exclusion for employer-provided mass transit and parking benefits. This provision extends through 2013 the increase in the monthly exclusion for employer-provided transit and vanpool benefits from $125 to $240, so that it would be the same as the exclusion for employer-provided parking benefits.
As stated, this rule is retroactive to months after December 31, 2011; however, there has been no guidance from the IRS on how to administer the retroactive provision. Over the next days and weeks, Benefit Resource will be closely examining this option and communicating options for employers who wish to apply the credit retroactively.