On December 18, 2015, Congress passed the Consolidated
Appropriations Act, 2016 (Public Law No. 114-113) which amended the
Internal Revenue Code to retroactively (and permanently) adjust the
limits on qualified transportation fringe benefits. On January 11,
2016, the Internal Revenue Service issued Notice 2016-6 to address
employers’ questions regarding the retroactive application of
the increased exclusion for 2015.
Code Section 132 excludes qualified transportation fringe
benefits from gross income, including: (1) transportation in
a commuter highway vehicle between home and work, (2) transit
passes, and (3) qualified parking. Prior to the Act, the
maximum monthly amount excludable from gross income was $250
per month for qualified parking, and $130 for transportation in a
commuter highway vehicle and transit passes combined (collectively,
“transit benefits”). The Act amended Code Section
132(f) to equalize the income exclusions for parking expenses and
transit
