On Oct  19, 2017, the IRS  issued Revenue Procedure 2017-58. “For tax year 2018, the monthly limitation for the qualified transportation fringe benefit is $260, as is the monthly limitation for qualified parking.” The 2017 limit is $255 per month as noted below. The bicycle benefit remains unchanged at $20 per month.

Section 132(f) of the Internal Revenue Code allows employers to provide tax-free benefits to employees related to transit, vanpools, parking and bike-to-work; these Qualified Transportation Fringe Benefits are commonly referred to as commuter benefits. Businesses may deduct the administrative cost of these employer-paid benefits from their gross incomes for purposes of taxation. Both the employer and employee save on taxes since they do not pay federal income or payroll taxes on these benefits.

Under the tax code, employers may offer these Qualified Transportation Fringe Benefits in one of six ways:

1. Subsidizing an employee up to $255 per month for transit and commuter highway vehicles (e.g., vanpool).
2. Subsidizing an employee up to $255 per month for parking.
3. Allowing an employee to reduce his or her income on a pre-tax basis to cover the costs of transit and vanpools up to $255 per month.
4. Allowing an employee to reduce his or her income on a pre-tax basis to cover the costs of parking up to $255 per month.
5. Sharing the costs of the benefit with the employee; under current law, transit and vanpool expenses up to $255 per month and/or qualified parking expenses up to $255 per month are tax-free.
6. Reimbursing an employee up to $20 per month ($240 per year) for eligible expenses incurred for bicycling to work on a regular basis.

Every business knows that the secret to success is minimizing expenses, attracting key talent and retaining good employees. With vanpool you can provide your employees with an incentive that saves them money, benefits the environment, reduces traffic and parking congestion and helps your business be more sustainable.  Vanpool is a benefit-driven shared commuting option that has myriad benefits, including:

• Pre-tax benefits for each participating employee.
• Fewer cars in your parking lot.
• Reduced parking expenses.
• Greener, more environmentally friendly commutes.
• The potential of offering employees the ability to save money while they earn money.
• An enticement to prospects with lengthy commutes of a more cost-effective way to get to work.

Just paving a space for every car you expect to visit your location each day isn't the best decision on providing parking. Parking is expensive. Parking deck spaces average about $16,000 a year to build and maintain in the Triangle. Unused parking spaces in paved lots could have been more development or greenspace.

Most businesses or residences in the Triangle rely on parking – but how much parking do you really need? Not all employees are at work all of the time. And what’s the most efficient way to maximize usage and minimize costs or tradeoffs?

Need more parking spaces or don’t have enough real estate?

• You don’t need a space for every employee since arrival, departure and in-office schedules vary, as well as vacation and sick leave.
• Preferential parking for carpools and vanpools can decrease the number of parked vehicles by demonstrating benefits and options to driving alone.
• Sharing space with a nearby business or multi-family housing may be a solution since the parking spaces will be needed at different times of the day.
• Frequent transit service to your location may reduce the number of spaces you’re required to build depending on your municipality.

Parking is expensive to provide, so don’t pay or pave more than you actually need. Our employer services staff can discuss how to maximize parking based on your needs and location as well as how to leverage transportation options.