Page 291 - Small Business IRS Training Guides

Prior Tax Law

Qualified Transportation Fringes: This exclusion is defined in IRC 132(f) and applies to the following benefits:

a. A ride in a commuter highway vehicle, under IRC 132(f)(5)(A), meaning any highway vehicle that transports

the employee between the employee’s home and work place. The vehicle must seat at least 6 adults (excluding
the driver) and the expectation must exist that at least 80 percent of the vehicle’s mileage will be for transporting
employees between home and work. Employees must occupy at least one-half of the seats, not including

the driver.

b. A transit pass, under IRC 132(f)(5)(A), meaning any mass transit pass, token, farecard, or voucher entitling a
person to ride free or at a reduced rate on a mass transit system or in a vehicle that seats at least 6 adults

(excluding the driver).

c. Qualified parking, under IRC 132(f)(5)(C), meaning parking that the employer provides to employees on or near the
employer’s business premises. It also includes parking on or near the location from which employees commute to

work using mass transit, commuter highway vehicles, carpools or any other means, and

d. Qualified bicycle commuting reimbursement, under IRC 132(f)(5)(F), meaning any employer reimbursement during

the 15-month period beginning with the first day of such calendar year for reasonable expenses incurred by the
employee during such calendar year for the purchase of a bicycle and bicycle improvements, repair, and storage,

if such bicycle is regularly used for travel between the employee’s residence and place of employment.

A qualified bicycle commuting reimbursement is a reimbursement provided by an employer for any reasonable expenses
incurred by the employee during a calendar year for the purchase of a bicycle and bicycle improvements, repair, and

storage. An employee is eligible for this reimbursement only for months during which the employee:

• Regularly uses the bicycle for a substantial portion of the travel between his or her residence and place of

employment, and

• Does not receive any other form of qualified transportation fringe benefit (that is, transportation in a commuter
highway vehicle, transit pass, or qualified parking).

73233-102 11047-3 Tax Cuts and Jobs Act