Finance and Accounting won’t have to make any adjustments to the amount they can reimburse employees tax-free for their commuting expenses. IRS announced in Revenue Procedure 2020-45 that it’ll hold both 2021 transportation fringe benefit limits steady.
So for tax year 2021, the monthly limitations remain the same as in 2020, which are:
- $270 for qualified transportation fringe benefits, and
- $270 for qualified parking.
Remember, the Tax Cuts and Jobs Act of 2017 took away employers’ ability to deduct employer-provided qualified transportation fringe benefits.