October 8, 2014

Exceeding Qualified Parking Limits are Taxable (article)

The IRS issued an Information Letter (2014-0017) reminding taxpayers that there may be a tax consequence for providing qualified parking that exceeds the qualified parking limit.  As background, IRC Section 132(f) provides that qualified parking expenses are available on a tax-favored basis up to certain limits.  The indexed limit for 2014 is $250.  This Information Letter reminds taxpayers that qualified parking that exceeds this amount is includible in the employee’s income and subject to FICA and FUTA withholding.

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