On December 16th, 2014, Congress passed legislation that retroactively increased the 2014 transit benefit monthly limit from $130 to $250.
As a result of this change, employers may be required to adjust 2014 tax withholding and reporting to reflect this increase.
This legislation does not change the 2015 transit benefit limit. Thus, beginning on January 1st, 2015, the transit limit will again fall to $130/month unless Congress again addresses the issue.
In regards to the retroactive change for 2014, employers may consider the following action:
- Communicate with your employees that the transit limit increase is only for 2014
- Monitor for future guidance from the IRS regarding adjustments to 2014 tax withholding and reporting
- Reach out to your tax advisor or payroll processor for further guidance on next steps
I hope that you find this brief legislative update helpful. If you have additional questions, please contact the CBG Benefits team at 781-759-1222.
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