For an employee working two jobs, can they receive qualified transportation fringe benefits from each employer? With more employers adding transit and parking benefits for their employees, and more employees working multiple jobs, this question keeps popping up.
The answer to this question is generally “yes” - an employee working two jobs can receive qualified transportation fringe benefits from each employer. How much depends on whether the employers are related or not. If the employers are related, the employee can receive benefits from both employers up to the monthly statutory dollar limit. If the employers are not related, the employee is not limited by the monthly statutory dollar limit.
For example, assume that the employee’s monthly parking expense is $500 per month, and the employee works for two different employers, both of whom provide qualified transportation fringe benefits which include a qualified parking benefit. In Rev. Proc. 2007-66, the IRS announced the monthly limit for parking expenses is $220. If the employers are unrelated, the employee can receive $220 from each employer. If the employers are related, the employee is limited to a combined benefit of $220 from both employers. If the employers are related, any excess the employee receives above the $220 monthly limit is taxable to the employee for income and employment tax purposes.
The examples to Treas. Reg. 1.132-9(b), Q&A-10, state:
(b) Examples. The following examples illustrate the principles of this Q/A-10:
Example (1). (i) During a year in which the statutory monthly qualified parking limit is $175, Employee E works for Employers M and N, who are unrelated and not treated as a single employer under section 414(b), (c), (m), or (o). Each month, M and N each provide qualified parking benefits to E with a value of $100.
(ii) In this Example 1, because M and N are unrelated employers, and the value of the monthly parking benefit provided by each is not more than the applicable statutory monthly limit, the parking benefits provided by each employer are excludable as qualified transportation fringes assuming that the other requirements of this section are satisfied.
Example (2). (i) Sames facts as in Example 1, except that Employers M and N are treated as a single employer under section 414(b).
(ii) In this Example 2, because M and N are treated as a single employer, the value of the monthly parking benefit provided by M and N must be combined for purposes of determining whether the applicable statutory monthly limit has been exceeded. Thus, the amount by which the value of the parking benefit exceeds the monthly limit ($200 minus the monthly limit amount of $175 equals $25) for each month in the year is includible in E’s wages for income and employment tax purposes.
Additional Information:
- IRS FAQ on the Community Renewal Act of 2000
Technorati Tags: Pension Protection Act, ppa, parking, qualified transportation, 132(f)(4), ERISA
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