{"id":31816,"date":"2022-10-20T15:59:40","date_gmt":"2022-10-20T19:59:40","guid":{"rendered":"https:\/\/gtm.com\/household\/?p=31816"},"modified":"2022-10-20T15:59:40","modified_gmt":"2022-10-20T19:59:40","slug":"qualified-transportation-benefit-2023","status":"publish","type":"post","link":"https:\/\/gtm.com\/household\/qualified-transportation-benefit-2023\/","title":{"rendered":"Qualified Transportation Fringe Benefit Limits to Increase in 2023"},"content":{"rendered":"
\"qualified-transportation-benefit-2023\"

The IRS has released its cost-of-living adjustments for employee-qualified transportation fringe benefits for the 2023 tax year.<\/p><\/div>\n

The IRS has released its cost-of-living adjustments for employee-qualified transportation fringe benefits for the 2023 tax year and annually adjusted numbers for 2023 for other tax provisions.<\/p>\n

The combined monthly limit for transportation in a commuter highway vehicle and a transit pass will increase to $300 in 2023<\/strong>, up from the 2022 limit of $280. The monthly limit in 2023 for qualified parking will also increase to $300<\/strong> from $280.<\/p>\n

Qualified transportation fringe benefits<\/h2>\n

The IRS allows employers \u2013 including families with household help \u2013 to offer qualified transportation benefit programs to their employees on a tax-free basis.<\/p>\n

Under these programs, employees may have money withheld from their taxable compensation to pay or reimburse work-related expenses for qualified parking<\/a>, transit passes, and transportation in certain commuter highway vehicles (e.g., qualifying van pools).<\/p>\n

Families may also provide these benefits tax-free to their employees.<\/p>\n

The IRS established a maximum monthly amount of qualified transportation benefits employees may exclude from their income, subject to cost-of-living adjustments announced by the agency before the beginning of each calendar year.<\/p>\n

Both employee pre-tax salary deferrals and employer-paid benefits, if any, count toward the maximum amount.<\/p>\n

No tax deduction for employers<\/h2>\n

Beginning in 2018, the Tax Cuts and Jobs Act of 2017<\/a> eliminated the employer tax deduction for qualified transportation benefits. The employer deduction is disallowed regardless of whether the benefits are paid directly by the family, through a bona fide reimbursement arrangement or through a compensation reduction agreement.<\/p>\n

GTM can help<\/h2>\n

Have questions about paying your nanny the right way including how to reduce your and your employee’s tax obligations? Give us a call at (800) 929-9213 for a complimentary, no-obligation consultation with a household employment expert. Or schedule time with us at your convenience<\/a>.<\/p>\n

Download The Complete Guide to Household Payroll<\/h2>\n

Get our complimentary guide and learn everything you need to know about paying your employees legally and filing your taxes the right way.
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