Report a Comment

Employers can give an unlimited value in free parking. In other words, even if the market value of a paking space is, say, $1,000 a month, an employer can give it to the employees for free if they want. The $220 cap is on the tax deduction for employees who have to pay for parking.

Yes, employers can give an unlimited value in free parking but only the first $220/month can be given to employees tax free -- meaning, employees don't have to pay income tax on the benefit because it's not considered part of their income. Employees who have to pay for parking get no tax deduction. Here's an explanation of how the benefit works:

Qualified Transportation Fringe (QTF) benefits include:
•
Commuter transportation in a commuter highway vehicle
•
Transit passes
•
Qualified parking
•
Qualified bicycle commuting expenses

Employer-provided QTFs with fair market values (FMV) that do not exceed monthly excludable limits are exempt from withholding and payment of employment taxes, not reported as taxable wages on the employee's Form W-2, and not included in gross income.

These qualified transportation fringe benefits are excluded from an employee's gross income for income tax purposes and from an employee's wages for payroll tax purposes.

http://www.irs.gov/pub/irs-tege/fringe_benefit_fslg.pdf

http://www.irs.gov/newsroom/article/0,,id=205664,00.html

by Falls Church on Aug 13, 2012 10:58 am • link • report

Does this comment violate Greater Greater Washington's comment policy? If so, you can report it using this form and an editor will take a look.

What is the major reason you believe the comment violates the policy?
Comment is spam.
Comment attacks other individuals personally.
Comment criticizes the level of knowledge of another commenter or contributor.
Comment discourages others from posting their ideas.
Commenter is impersonating someone else.
Comment uses profanity or abusive language.
Comment advocates violent acts or harm to another.
Comment was posted in multiple areas of the site.
Comment is arguing about the comment policy.
Other:

Your name:
Your email:

Administrator page • spam