Transit Limits Increased Retroactively for 2014!

What changed?

On December 19, President Barack Obama signed into law H.R. 5771, the Tax Increase Prevention Act of 2014. This legislation made significant impact upon a number of pre-tax benefits including commuter benefit plans. The legislation, passed by Congress earlier in December, will extend retroactively for one year (through the end of 2014) a number of tax relief provisions that expired either at the end of calendar year 2013 or during 2014, thus preventing tax increases when the tax year 2014 filing season begins early in 2015.  As a result of this new legislation transit and parking pre-tax limits will be set to the $250/month limit.  This is an increase for transit benefits from the current $130/month limit while pre-tax parking benefits remain the same at $250/month.

How does this affect our benefits?

If you currently offer post-tax transit benefit plans you will need to adjust any 2014 post-tax deductions to be pre-tax up to $250/month.  Current IRS guidance indicates that pre-tax transit limits will remain at the $130/month level in 2015.  You do not need to contact HRCTS for any additional adjustments to your benefit plans.  This change will only affect your employees W2 statements.


No Changes to Parking and Transit Pretax Contribution Limits

The maximum pretax contribution employees can make to cover qualified transit and parking expenses is not changing. These are the applicable numbers for the 2015 tax year – effective January 1, 2015. Please read the entire IRS Revenue Procedure 2014-61 for more information.

  • Parking: $250

  • Transit: $130

Qualified Transit Locations

Qualified Transit Locations

As a reminder to our clients on January 1, 2012, IRS Revenue Ruling 2006-57 added restrictions to the usage of Transportation Benefit Debit Cards.  Beginning on January 1, 2012 any Transportation Benefit Debit Cards with HR Concepts were restricted for use at merchant terminals which only sell transit fare media. The regulation indicates that the benefit card must be terminal restricted so that the transactions are limited to POS terminals that sell only transit fare media. Please review the qualified transit ID list to determine which transit authorities are in compliance with the IRS ruling.  If a transaction is denied at a terminal or kiosk it is likely due to that terminal not being on the list.  This is typically a temporary issue that the Transit Authority will address but nevertheless can impact transit participants looking to purchase fare media.


Click Here to Chat
Chat Offline
FSA Eligible Expenses and Items

Need a Quote?

Click here and submit your details below



Copyright © 2019 HRC Total Solutions, All Rights Reserved Website Design & Development by:The Scribbit