IRS outlines 2014 monthly qualified transportation plan limits
Employees who make use of consumer-directed heathcare plans that allow them to save tax-advantaged funds have a few new rules to study up on. The Internal Revenue Service recently outlined new monthly limits on the qualified transportation benefits provided by employers outside of taxable income.
The monthly limit in the cash that can be excluded from an employee’s income for the sake of qualified parking benefits will be $250 starting in 2014, up slightly from the $245 limit that was in place throughout 2013. The 2014 combined monthly limit for transit passes used by commuter highway vehicles is now $130, however, down from $245 during 2012.
The substantial decrease in transit benefits comes as a result of the expiration of a temporary ”rule of parity.” That rule made the combined limit for transit and vanpooling activities the same as the parking limits, and was in effect through both 2012 and 2013. However, said rule is no longer in effect, hence the $115 decrease.
It’s been reported that Congress may elect to extend the rule of parity through 2014, which would raise the transit pass limit to $245 yet again. However, this is an uncertain proposition.
*Note: Content provided is not intended as legal or tax advice.