This week’s question comes from Steve, an HR director. We provide transportation benefits to our employers. In 2010, we could exclude $230 per month for most qualified transportation benefits. What is the monthly limit on the value of qualified transportation benefits? Answer: The Internal Revenue Service (IRS) in IR-2010-127 announced inflation adjustments related to several tax provisions. Among them, the IRS announced that for 2011, the monthly limit on the value of qualified transportation benefits provided by an employer to its employees would remain at $230.

Details Found in Revenue Procedure 2011-12

Details on the inflation adjustments are found in Revenue Procedure 2011-12. The eight items for which adjustments are included are the following:

1. Tax Rate Tables
2. Child Tax Credit
3. Hope Scholarship and Lifetime Learning Credits
4. Earned Income Credit
5. Standard Deduction
6. Qualified Transportation Fringe
7. Personal Exemption
8. Interest on Education Loans

Qualified Transportation Benefits Limits Are Unchanged

Employers are again allowed to exclude from wages the value of transportation benefits provided to an employee up to the following limits:

• $230 per month for combined commuter highway vehicle transportation and transit passes.
• $230 per month for qualified parking.
• For a calendar year, $20 multiplied by the number of qualified bicycle commuting months during that year for qualified bicycle commuting reimbursement of expenses incurred during the year.

Do You Still Have Questions on Qualified Transportation Benefits?

Contact Vision Payroll if you have further questions on the limit on the value of qualified transportation benefits.