Detailing Transportation Fringe Benefits

Fringe benefits are an integral part of the total compensation package for employees in today’s workforce. When determining what fringe benefits to provide to your employees the first question that usually arises is “how are we going to do it”. For example, the company has decided to assist employees in their commuting efforts. You have decided that certain levels of employees will be entitled to the full-time use of a company car. You have determine that certain other employees, while not provided a company car, will be provided free parking for their own vehicle. While still other employees, such as the rank and file, will be entitled to bus passes or subway tokens. You do all the required work locating the best packages for both employer and employee. But your task doesn’t stop once the fringe benefit is provided. The very next question that must be answered before that employee starts that new car, pulls into the parking space or hops on the bus is---what are the IRS taxation and reporting requirements for this fringe benefit?

The Internal Revenue Code has strict guidelines on many types of fringe benefits that must be adhered to in order to avoid audits and penalties. This is especially true in the area of transportation fringe benefits. The definition of transportation fringe benefits crosses the spectrum from all of the types of benefits discussed above and may even include the time spent on a private company plane. And the taxation requirements can be just as varied—from no taxation and reporting under IRC Section 132 to the required use of algebraic formulas to determine the taxable wages. And that does not even address the requirements when reimbursing employees for the business use of their personal vehicle. In this 60-minute webinar we will address all these issue including examples of the math.

The following bullet points are covered in this webinar:
• What are the four allowable methods to calculate the personal use of a company car
• How to calculate the taxable wages for the personal use of a company vehicle using one of the four accepted IRS methods
• When an auto allowance is considered taxable wages and when it is not
• IRS 132 transportation fringe benefits including parking, bus passes and tokens and bicycles—when to tax and when not too—what are the limits
• Calculating the personal use of a company aircraft even if there is a business trip involved somewhere

payroll professionals, compensation professionals and human resources professionals.

The following bullet points are covered in this webinar: • What are the four allowable methods to calculate the personal use of a company car • How to calculate the taxable wages for the personal use of a company vehicle using one of the four accepted IRS methods • When an auto allowance is considered taxable wages and when it is not • IRS 132 transportation fringe benefits including parking, bus passes and tokens and bicycles—when to tax and when not too—what are the limits • Calculating the personal use of a company aircraft even if there is a business trip involved somewhere

The Payroll Advisor’s Guide to Fringe Benefits IRS Publication 15-B IRS Publication 525

		Vicki M. Lambert, CPP The Payroll Advisor View Profile