4.1. ERMUSR 05-12-2009 - Laserfiche WebLink

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the exclusion does not apply to services for tax prepara- tion, accounting, legal, or brokerage services. Transportation (Commuting) Benefits This section discusses exclusion rules that apply to bene- fits you provide to your employees for their personal trans- portation, such as commuting to and from work. These rules apply to the following transportation benefits. • De minimis transportation benefits. • Qualified transportation benefits. Special rules that apply to demonstrator cars and qualified nonpersonal-use vehicles are discussed under Working Condition Benefits, later. De Minimis Transportation Benefits You can exclude the value of any de minimis transportation benefit you provide to an employee from the employee's wages. A de minimis transportation benefit is any transpor- tation benefit you provide to an employee if it has so little value (taking into account how frequently you provide transportation to your employees) that accounting for it would be unreasonable or administratively impracticable. For example, it applies to occasional transportation fare you give an employee because the employee is working overtime if the benefit is reasonable and is not based on hours worked. Employee. For this exclusion, treat any recipient of a de minimis transportation benefit as an employee, Qualified Transportation Benefits This exclusion applies to the following benefits. • A ride in a commuter highway vehicle between the employee's home and work place. • A transit pass. • Qualified parking. The exclusion applies whether you provide only one or a combination of these benefits to your employees. Qualified transportation benefits can be provided directly by you or through a bona fide reimbursement arrange- ment. However, cash reimbursements for transit passes qualify only if a voucher or a similar item that the employee can exchange only far a transit pass is not readily available for direct distribution by you to your employee. A voucher is readily available for direct distribution only if an employee can obtain it from a voucher provider that does not impose fare media charges or other restrictions that effectively prevent the employer from obtaining vouchers. See Regu- lations section 1.132-9 for more information. You can exclude qualified transportation fringe benefits from an employee's wages even if you provide them in place of pay. Far information about providing qualified transportation fringe benefits under a compensation reduc- tion agreement, see Regulations section 1.132-9(b)(Q-11). Commuter highway vehicle. A commuter highway vehi- cle is any highway vehicle that seats at least 6 adults (not including the driver). In addition, you must reasonably expect that at least 80% of the vehicle mileage will be for transporting employees between their homes and work place with employees occupying at least one-half the vehi- cle's seats (not including the driver's). Transit pass. A transit pass is any pass, token, farecard, voucher, or similar item entitling a person to ride, free of charge or at a reduced rate, one of the following. • On mass transit. • In a vehicle that seats at least 6 adults (not including the driver) if a person in the business of transporting persons for pay or hire operates it. Mass transit may be publicly or privately operated and includes bus, rail, or ferry. For guidance on the use of smart cards and debit cards to provide qualified transporta- tion fringes, see Rev. Rul. 2006-57, which is on page 911 of internal Revenue Bulletin 2006-47 at www.irs.gov/pub/ irs-irbs/irb06-47.pdf, and Notice 2007-76, which is on page 735 of Internal Revenue Bulletin 2007-40 at www.irs.gov/ pub/irs-irbs/irb07-40. pdf. Qualified parking. Qualified parking is parking you pro- vide toyour employees on or near your business premises. It includes parking on or near the location from which your employees commute to work using mass transit, com- muter highway vehicles, or carpools. It does not include parking at or near your employee's home. Employee. For this exclusion, treat the following individu- als as employees. • A current employee. • A leased employee who has provided services to you on a substantially full-time basis far at least a year if the services are performed under your pri- mary direction or control. A self-employed individual is not an employee for quali- fied transportation benefits. Exception for S corporation shareholders. Do not treat a 2% shareholder of an S corporation as an employee of the corporation for this purpose. A 2% shareholder is someone who directly or indirectly owns (at any time dur- ing the year) more than 2% of the corporation's stock or stock with more than 2°io of the voting power. Treat a 2% shareholder as you would a partner in a partnership for fringe benefit purposes, but do not treat the benefit as a reduction in distributions to the 2°rn shareholder. Relation to other fringe benefits. You cannot exclude a qualified transportation benefit you provide to an employee under the de minimis or working condition benefit rules. However, if you provide a local transportation benefit other than by transit pass or commuter highway vehicle, or to a perscn other than an employee, you may be able to ex- clude all or part of the benefit under other fringe benefit rules {de minimis, working condition, etc.). Exclusion from wages. You can generally exclude the value of transportation benefits that you provide to an employee during 2008 from the employee's wages up to the following limits. Publication 15-B (2008) Page 17