Yes, there are. Under Internal Revenue Service (IRS) Section 132(f), employers may offer qualified transportation fringe benefits on a salary-reduction basis.

An employer may provide this benefit for transit passes, van pools and free or subsidized parking. The employer may deduct any associated costs as ordinary and necessary business expenses.

Employees appreciate these plans, as the value of the transportation benefits, up to specified limits, does not count as taxable income for the Federal Insurance Contributions Act, the Federal Unemployment Tax Act or income tax purposes.

The plan providing qualified transportation benefits does not have to be in writing, but the employer does need to have business-related criteria for employees to receive the benefit.

To review IRS provisions regarding qualified transportation benefits, including the latest information on the maximum value of transporation benefits that can be excluded from employees' wages, see the IRS Employer's Guide to Fringe Benefits.

Please Note: This material is provided as general information and is not a substitute for legal or other professional advice. Contact the Knowledge Center for more information.

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