Final Rules for Commuter and Parking Plans

The Tax Cuts and Jobs Act (TCJA) made several fringe benefit tax changes, such as repealing the deduction for qualified transportation fringe benefits effective January 1, 2018.  This includes:

1. transportation in a commuter highway vehicle between the employee’s residence and place of employment
2. any transit pass
3. qualified parking
4. qualified bicycle commuting expenses

The IRS has issued an advance copy of their final rule on the TCJA qualified transportation changes.  Employers with these plans will want to review the final rule to ensure compliance, as the rules take effect the day they’re officially published in the federal register.  A high level summary can be found here and here, but you may want to consult your §132 plan administrator to discuss changes specific to your plans.

The IRS has also published an FAQ providing COVID-19 relief for van pools to describe how the 80/50 rule may be treated as satisfied if it was reasonably expected to comply but ultimately didn’t due to the COVID-19 emergency.

IMA will continue to monitor regulator guidance and offer meaningful, practical, timely information.

This material should not be considered as a substitute for legal, tax and/or actuarial advice. Contact the appropriate professional counsel for such matters. These materials are not exhaustive and are subject to possible changes in applicable laws, rules, and regulations and their interpretations.