Publication 15-B - Employer'S Tax Guide To Fringe Benefits - 2012 Page 21
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In a vehicle that seats at least 6 adults (not including
However, if you provide a local transportation benefit other
the driver) if a person in the business of transporting
than by transit pass or commuter highway vehicle, or to a
persons for pay or hire operates it.
person other than an employee, you may be able to ex-
clude all or part of the benefit under other fringe benefit
Mass transit may be publicly or privately operated and
rules (de minimis, working condition, etc.).
includes bus, rail, or ferry. For guidance on the use of
smart cards and debit cards to provide qualified transporta-
Exclusion from wages. You can generally exclude the
tion fringes, see Revenue Ruling 2006-57, 2006-47 I.R.B.
value of transportation benefits that you provide to an
911, available at
employee during 2012 from the employee’s wages up to
and Notice 2010-94, 2010-52 I.R.B. 927, available at
the following limits.
•
$125 per month for combined commuter highway
vehicle transportation and transit passes.
Qualified parking. Qualified parking is parking you pro-
vide to your employees on or near your business premises.
•
$240 per month for qualified parking.
It includes parking on or near the location from which your
•
For a calendar year, $20 multiplied by the number of
employees commute to work using mass transit, com-
qualified bicycle commuting months during that year
muter highway vehicles, or carpools. It does not include
for qualified bicycle commuting reimbursement of ex-
parking at or near your employee’s home.
penses incurred during the year.
Qualified bicycle commuting reimbursement. For any
calendar year, the exclusion for qualified bicycle commut-
Qualified bicycle commuting month. For any em-
ing reimbursement includes any employer reimbursement
ployee, a qualified bicycle commuting month is any month
during the 15-month period beginning with the first day of
the employee:
the calendar year for reasonable expenses incurred by the
1. Regularly uses the bicycle for a substantial portion of
employee during the calendar year.
the travel between the employee’s residence and
Reasonable expenses include:
place of employment and
•
The purchase of a bicycle, and
2. Does not receive:
•
bicycle improvements, repair, and storage.
a. Transportation in a commuter highway vehicle,
These are considered reasonable expenses as long as the
b. Any transit pass, or
bicycle is regularly used for travel between the employee’s
residence and place of employment.
c. Qualified parking benefits.
Employee. For this exclusion, treat the following individu-
Benefits more than the limit. If the value of a benefit
als as employees.
for any month is more than its limit, include in the em-
•
A current employee.
ployee’s wages the amount over the limit minus any
•
amount the employee paid for the benefit. You cannot
A leased employee who has provided services to
exclude the excess from the employee’s wages as a de
you on a substantially full-time basis for at least a
year if the services are performed under your pri-
minimis transportation benefit.
mary direction or control.
More information. For more information on qualified
transportation benefits, including van pools, and how to
A self-employed individual is not an employee for quali-
determine the value of parking, see Regulations section
fied transportation benefit purposes.
1.132-9.
Exception for S corporation shareholders. Do not
treat a 2% shareholder of an S corporation as an employee
Tuition Reduction
of the corporation for this purpose. A 2% shareholder is
someone who directly or indirectly owns (at any time dur-
An educational organization can exclude the value of a
ing the year) more than 2% of the corporation’s stock or
qualified tuition reduction it provides to an employee from
stock with more than 2% of the voting power. Treat a 2%
the employee’s wages.
shareholder as you would a partner in a partnership for
A tuition reduction for undergraduate education gener-
fringe benefit purposes, but do not treat the benefit as a
ally qualifies for this exclusion if it is for the education of
reduction in distributions to the 2% shareholder.
one of the following individuals.
Relation to other fringe benefits. You cannot exclude a
1. A current employee.
qualified transportation benefit you provide to an employee
2. A former employee who retired or left on disability.
under the de minimis or working condition benefit rules.
Publication 15-B (2012)
Page 21
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