Lawmakers on Capitol Hill have put transit parity — that is, the equalization of mass transit and qualified parking benefits under tax Code Section 132 — back in play, after watching it fail earlier in the session. The legislation would extend a temporary parity provision that expired Dec. 31, 2011, for another two years.
Sen. Max Baucus (D-Mont.), chairman of the Finance Committee, announced Aug. 2 the details of the legislation that would contain the parity provision, which as of press time did not have a bill number. The bill is known as the Family and Business Tax Cut Certainty Act of 2012.
Under the bill, the amount that could be excluded for mass transit and vanpool expenses as qualified transportation fringe benefits, would increase from the current monthly limit of $125 to $240. This change would make mass transit and van pool limits equal to that of qualified parking under QTFBs, until Dec. 31, 2013.
The provision would be retroactive to Jan. 1, 2012, meaning employers would be able to reimburse employees for expenses exceeding $125 per month that were incurred between Jan. 1, 2012 and enactment of the bill, up to the new limit of $240, on a tax-free basis, but only to the extent the amount has not already been excluded.
For additional information about transit and parking benefits, see Thompson’s employee benefits library, including the Employer’s Guide to Fringe Benefit Rules.