The Internal Revenue Service released its annual inflation adjustments for tax year 2019. The IRS has set the monthly cap for parking and transit benefits at $265/month, up from $260/month. Under the law, the monthly caps for fringe benefits are set to annual cost of living adjustments. The release did not include any new guidance on how employers or non-profit organizations are to treat changes made by the last year’s tax reform legislation, ‘Tax Cuts and Jobs Act’. Under that legislation, for-profit organizations are no longer allowed to write off employee commuting expenses. Additionally, non-profit organizations are required to add parking and transportation fringe benefit expenses to their ‘Unrelated Business Income Tax’. Questions remain as to how employers are to incorporate parking and other items.
It is possible that the IRS will issue a separate piece of guidance or may elect to include guidance as a part of the 2019 employer manual known as the 15-b publication, which is generally released in December or January.