IRS to Implement Special Transit Benefit Procedure

On January 8, 20iStock_000014266939XSmall15 the IRS issued Notice 2015-2 “Application of Retroactive increase in Excludable Transit Benefits” which allows employers to implement a retroactive increase in excludable qualified transit benefits.   The adjustment can be made on the 4th quarter Form 941 (Employer’s Quarterly Federal Tax Return) to reduce wages subject to withholding for all 4 quarters of 2014.

Form 941 filing is due January 31, 2015.

The monthly exclusion for qualified commuter benefits increased from $130 to $250 per month per employee until January 15, 2015 at which time commuter benefits will effectively drop back to $130.