- $125 per employee per month for public transportation (car pool, bus, ferry, rail, etc.).
- $240 per employee per month for qualified parking.
- $365 per employee per month for both public transportation and qualified parking.
Looking for a new benefit to give your employees? Consider offering a commuter benefit program. This program not only makes your business look more appealing, but it is environmentally friendly and a tax-free benefit for your employees. Here's how it works. Your company can provide:
What does this mean for your wallet?
A flexible spending account (FSA) allows an employee to set aside a portion of their paycheck to pay for qualified medical, health and dependent expenses. Money placed into an FSA is not subject to payroll taxes, resulting in savings to the employee. The money not used in an FSA at the end of the year is lost to the employee.
A new 2013 contribution limit only allows employees to deposit a maximum of $2,500 into their account per tax year. Employer contributions to employee FSA accounts are not included in the $2,500 limit. The $2,500 limit does not apply for plan years that begin before 2013; therefore, if your company's plan year is July-June, the $2,500 limit will not begin until July 2013.
Some plans offer a grace period that gives you extra time to claim FSA money before losing it. The grace period might give you up to two months and 15 days after the end of the plan year. Unused contributions to the FSA for plan years beginning in 2012 or later that are carried over into the grace period for that plan year will not count against the $2,500 limit for the subsequent plan year.
When an employer provides an employee with a cell phone primarily for noncompensatory business reasons, the business and personal use of the cell phone are generally nontaxable to the employee as an excludable fringe benefit. Excludable fringe benefits are not included in wages. If the cost of an item is deductible by an employee as a business expense, it may be excludable from the employee's wages as a working condition fringe benefit if provided by the employer. The IRS will not require recordkeeping of the phone's business use from individuals who receive this tax-free treatment.
When a business provides the employee with a cash allowance or reimbursement to pay for a personal cell phone used for business purposes, the amount is also considered an excludable fringe benefit and nontaxable. However, the employee must maintain the type of cell phone coverage that is reasonably related to the needs of the employer's business. Plus, the reimbursement must be reasonably calculated so as not to exceed expenses the employee actually incurred in maintaining the cell phone. Additionally, the reimbursement for business use of the employee's personal cell phone must not be a substitute for a portion of the employee's regular wages.
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