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Transit pass - A transit pass is any pass, token, fare-card, voucher, or similar item entitling a person to ride, free of charge or at a reduced rate, one of the following:
- On mass transit.
- In a vehicle that seats at least 6 adults (not including the driver) if a person in the business of transporting persons for pay or hire operates it.
- Mass transit may be publicly or privately operated and includes bus, rail, or ferry.
Qualified parking - Qualified parking is parking you provide to your employees on or near your business premises. It includes parking on or near the location from which your employees commute to work using mass transit, commuter highway vehicles, or carpools. It does not include parking at or near your employee's home.
For this exclusion, treat the following individuals as employees:
· A current employee.
· A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control.
· A self-employed individual is not an employee for qualified transportation benefits.
Exception for S corporation shareholders:
Do not treat a 2% shareholder of an S corporation as an employee of the corporation for this purpose. A 2% shareholder is someone who directly or indirectly owns (at any time during the year) more than 2% of the corporation's stock or stock with more than 2% of the voting power.Relation to other fringe benefits:
You cannot exclude a qualified transportation benefit you provide to an employee under the de minimis or working condition benefit rules. However, if you provide a local transportation benefit other than by transit pass or commuter highway vehicle, or to a person other than an employee, you may be able to exclude all or part of the benefit under other fringe benefit rules (de minimis, working condition, etc.).Exclusion from wages:
You can generally exclude the value of transportation benefits that you provide to an employee during 2007 from the employee's wages up to the following limits:
- $110 per month for combined commuter highway vehicle transportation and transit passes.
- $215 per month for qualified parking.
Benefits more than the limit - If the value of a benefit for any month is more than its limit, include in the employee's wages the amount over the limit minus any amount the employee paid for the benefit. You cannot exclude the excess from the employee's wages as a de minimis transportation benefit.
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