Skip to main content

Employer Tax Benefits

Qualified parking exclusion and commuter transportation benefit

For 2019, the monthly exclusion for qualified parking is $265 and the monthly exclusion for commuter highway vehicle transportation and transit passes is
$265. See Qualified Transportation Benefits in section 2. 

Qualified Transportation Benefits This exclusion applies to the following benefits.

• A ride in a commuter highway vehicle between the employee’s home and work place.

• A transit pass.

• Qualified parking.

You may provide an employee with any one or more of these benefits at the same time. Qualified transportation benefits can be provided directly by you or through a bona fide reimbursement arrangement. A bona fide reimbursement arrangement requires that the employee incur and substantiate expenses for qualified transportation benefits before reimbursement. However, cash reimbursements for transit passes qualify only if a voucher or a similar item that the employee can exchange only for a transit pass isn’t readily available for direct distribution by you to your employee. A voucher is readily available for direct distribution only if an employer can obtain it from a voucher provider that doesn’t impose fare media charges or other restrictions that effectively prevent the employer from obtaining vouchers. See Regulations section 1.132-9(b)(Q&A 16–19) for more information.

Source: IRS – Employer’s Tax Guide to Fringe Benefits 

Helpful Article: Monterey Bay Economic Partnership White Paper