Notice 2013-8 [PDF 21 KB] reflects guidance for measures enacted as part of the American Taxpayer Relief Act of 2012.
The IRS stated that it issued Notice 2013-8 in order to:
- Address employers’ questions regarding the retroactive application of the increased exclusion for 2012
- Clarify how the increase applies for 2012
- Provide a special administrative procedure for employers to use in filing Form 941, Employer’s QUARTERLY Federal Tax Return, for the fourth quarter of 2012 to reflect changes in the excludable amount for transit benefits provided in all quarters of 2012, and in filing Forms W-2, Wage and Tax Statement.
A “qualified transportation fringe” includes (when provided by an employer to an employee): (1) transportation in a commuter highway vehicle between home and work; (2) any transit pass; or (3) qualified parking.
Before the American Taxpayer Relief Act, the amount of excludable transit fringe benefits was $125 per month for commuter highway vehicle transportation and transit pass, and $240 for qualified parking.
The Act provided parity for the monthly excludable amount for employer-provided commuter highway vehicle transportation and transit pass benefits to the monthly excludable amount for qualified parking. This provision is effective retroactively beginning January 1, 2012, and extending through December 31, 2013.
Rev. Proc. 2013-15 was issued to (1) clarify that the maximum monthly excludable amount for employer-provided commuter highway vehicle transportation and transit pass benefits for 2012 at $240; and (2) specify that the maximum monthly excludable amount for 2013 is $245.
See TaxNewsFlash-United States: Rev. Proc. 2013-15 - Individual tax rate tables, inflation adjusted amounts for 2013
Notice 2013-8 provides guidance for:
- Employers that provided transit benefits in excess of $125 per month and less than or equal to $240 per month in 2012
- Employers that want to make FICA adjustments for 2012 on the form 941 filed for the fourth quarter of 2012 (as a special administrative procedure)
- Employers as instructions for the filed fourth quarter Form 941 or if the employer has not repaid or reimbursed all employees
- Employers as instructions for Forms W-2 for 2012 that have not yet been provided to employees
Notice 2013-8 applies to any employer that provides transportation benefits in excess of $125 per month. If the employer did not provide a transit benefit in excess of $125 per month in 2012, no adjustment is needed. Note that the benefit could have been provided by the employer out of its own funds or through salary reduction contributions by an employee. If employees did receive transportation benefits greater than $125 per month, Notice 2013-8 describes how the benefits are reported for FICA and federal income tax purposes.