INTERNAL REVENUE CODE Section 132
(F)As Amended by TEA-21, Title DC,
Section 910
Qualified Transportation Fringe
Benefit
(1) In general - For purposes of this
section, the term “qualified
transportation fringe” means
any of the following provided by an
employer to an employee:
A. Transportation in a commuter highway
vehicle if such transportation is in
connection with travel between an employee’s
residence and place of employment.
B. Any transit pass.
C. Qualified parking.
(2) Limitation on exclusion - The
amount of the fringe benefits which
are provided by an employer to any
employee and which may be excluded
from gross income under subsection
(a)(5) shall not exceed -
A. $100 per month in the case of the
aggregate of the benefits described
in subparagraphs (A) and (B) of paragraph
(1), and
B. $175 per month in the case of qualified
parking.
(3) Cash reimbursements - For purposes
of this subsection, the term “qualified
transportation fringe” includes
a cash reimbursement by an employer
to an employee for a benefit described
in paragraph (1). The preceding sentence
shall apply to a cash reimbursement
for any transit pass only if a voucher
or similar term which may be exchanged
only for a transit pass is not readily
available for direct distribution by
the employer to the employee.
(4) No Constructive Receipt - No amount
shall be included in the gross income
of an employee solely because the employee
may choose between any qualified transportation
fringe and compensation which would
otherwise be includable in gross income
of such employee.
(5) Definitions - For the purposes
of this subsection-
A. Transit pass - The term “transit
pass” means any pass, token,
farecard, voucher, or similar item
entitling a person to transportation
(or transportation at a reduced price)
if such transportation is-
(i). on mass transit facilities (whether
or not publicly owned), or
(ii) provided by any person in the
business of transporting persons for
compensation or hire if such transportation
is provided in a vehicle meeting the
requirements of subparagraph (B)(i).
B. Commuter highway vehicle - The
term “commuter highway vehicle”
means any highway vehicle-
(i) the seating capacity of which
is at least 6 adults (not including
the driver), and
(ii) at least 80 percent of the mileage
use of which can reasonably be expected
to be:
(I) for purposes of trasporting employees
in connection with travel between their
residences and their place of employment,
and
(II) on trips during which the number
of employees transported for such purposes
is at least 1/2 of the adult seating
capacity of such Vehicle (not including
the driver).
C. Qualified parking - The term “qualified
parking” means parking provided
to an employee on or near the business
premises of the employer or on or near
a location from which the employee
commutes to work by transportation
described in subparagraph (A), in a
commuter highway vehicle, or by carpool.
Such term shall not include any parking
on or near property used by the employer
for residential purposes.
D. Transportation provided by employer
- Transportation referred to in paragraph
(1)(A) shall be considered to be provided
by an employer if such transportation
is furnished in a commuter highway
vehicle operated by or for the employer.
E. Employee - For the purpose of this
subsection, the term “employee”
does not include an individual who
is an employee within the meaning of
section 401(c )(1).
(6) Inflation adjustment .
A. In General - In the case of any
taxable year beginning in a calendar
year after 1999, the dollar amounts
contained in subparagraphs (A) and
(B) of paragraph (2) shall be increased
by the amount equal to -
(i) such dollar amount, multiplied
by
(ii) The cost-of-living adjustment
determined under section 1(f)(3) for
the calendar year in which the taxable
year begins, by substituting “calendar
year 1998” for “calendar
year 1992”.
B. Rounding - If any increase determined
under subparagraph (A) is not a multiple
of $5, such increase shall be rounded
to the next lowest multiple of $5.
(7) Coordination with other provisions
- For the purposes of this section,
the terms “working condition
fringe” and “de minimis
fringe” shall not include any
qualified transportation fringe (determined
without regard to paragraph (2)).
Commuters