Special Procedures to Handle Payroll Tax Issues on Transit Benefits Made Retroactively Nontaxable by Tax Increase Prevention Act of 2014 Issued

The IRS has issued procedures for employers who paid transit benefits during 2014 that were included in employee’s income, but which since qualified as excludable benefits due to the increase in the limits for such benefits from $130 to $250 per participating employee due to Section 103 of the Tax Increase Prevention Act of 2014.  The guidance is found in Notice 2015-2.

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