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August 19, 2010
Commuter Tax Benefits Under the ARRA

In a BLR webinar entitled "Mileage/Commuting Expenses: How to Avoid Big Mistakes With These Employee Expenses," Mark E. Tabakman, Esq., partner in the nationwide law firm Fox Rothschild, LLP and Stacy Wade, Ph.D., CPA, assistant professor of accounting at Western Kentucky University, explained that commuter tax benefits increased under the American Recovery and Reinvestment Act (ARRA) of 2009 emergency stimulus package and have continued unchanged.

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  • Amounts of employer-provided transportation benefits that may be excluded from an employee's gross income will continue to a maximum of $230 per month or $2,760 per year for either transportation in a commuter vehicle or transit pass. The same amount, $230 per month, is allowed for qualified parking.
  • The applicable annual limitation for the qualified bicycle commuting reimbursement is $20 multiplied by the number of qualified bicycle commuting months during the calendar year (IRC Sec. 132(f)(2)).
  • Transportation benefits are also not subject to employment taxes.

Mark E. Tabakman, Esq., is a partner in the nationwide law firm Fox Rothschild, LLP (www.wagehourlaw.foxrothschild.com). He advises clients throughout the country on all aspects of labor relations and employment law, as well as the development of corporate employment policies. Stacy Wade, Ph.D., CPA, is assistant professor of accounting at Western Kentucky University (www.wku.edu). She teaches undergraduate and graduate courses in financial accounting and taxation.

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