Qualified Transportation Fringe Benefits refer to a category of employee benefits that provide tax-free reimbursement or subsidies for transportation costs associated with commuting to and from work.
These benefits can include:
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Transportation in a commuter vehicle: Employees can receive up to a specified monthly limit for transportation costs incurred while commuting via bus, train, or vanpool.
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Parking: Employers can also provide a tax-free subsidy for parking expenses incurred by employees at or near their workplace, up to a designated monthly limit.
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Bicycle commuting: Employers may reimburse employees for expenses related to biking to work, such as bike maintenance and storage.
The tax advantages of these benefits encourage employees to use public transportation or alternative commuting options, as they are not subject to federal income or payroll taxes. The limits for tax-free benefits are set by the IRS and may change annually.
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