2021 transportation fringe benefit limits released by IRS

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.

Jennifer Azara

Jennifer has covered business and finance for more than 24 years. She has written for CFOs, credit and collections professionals and accounts payable practitioners and has spoken at industry conferences on sales and use tax compliance.