IRS provides guidance to employers for applying the retroactive increase in excludable transit benefits - January 31, 2013 deadlines approach

January 2013


Notice 2013-8 provides guidance to employers with respect to the enactment of section 203 of the American Taxpayer Relief Act (ATRA) which increased retroactively, the monthly transit benefit exclusion under section 132(f)(2)(A) from $125 per participating employee to $240 per participating employee for the period of January 1, 2012 through December 31, 2012. Employers are facing January 31, 2013 deadlines for both the fourth Quarter Form 941, Employer’s Quarterly Federal Tax Return, and for issuing Forms W-2, Wage and Tax Statements, to employees. The Notice provides employers additional information needed to understand their requirements relative to the retroactive application of the increased exclusion for 2012. The IRS indicated that the Notice intends to reduce filing and reporting burdens. The Notice clarifies how the increase applies for 2012 and provides a special administrative procedure for employers to use in filing Form 941, 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.

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