Retroactive Increase to Mass Transit and Parking Benefit

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Dec 23, 2014, 12:57 ET

DALLAS, Dec. 23, 2014 /PRNewswire/ -- Included as part of the Tax Increase Prevention Act of 2014 signed by the President on December 19, 2014 were changes to mass transit benefits. The monthly maximum for mass transit benefits provided to an employee has been $130 per month, while the parking fringe benefit has been $250. The newly enacted Tax Increase Prevention Act of 2014 has equalized the two benefits retroactively to January 1, 2014 by increasing the mass transit benefit to $250.00. Transit commuters who run all their commuting costs through their employer's transit plan should get a retroactive true up—a potential $576 extra tax savings for 2014.

Ryan is an award-winning global tax services firm, with the largest indirect and property tax practices in North America and the sixth largest corporate tax practice in the United States.

Employers may have to correct the taxable fringe benefits for employees who used post-tax dollars to pay for any mass transit benefits that were provided above the $130 monthly maximum. As this change is retroactive to January 1, 2014, payroll amendments may be in order. Guidance from the Internal Revenue Service (IRS) will soon follow, describing the mechanism by which the adjustments may be made.

Additionally, the Tax Increase Prevention Act of 2014 gives the IRS six months to develop a program for certifying Professional Employer Organizations (PEOs). Under the Act, the PEOs can accept sole liability for their client employer's payroll taxes if they agree to the certification program. Additionally, under the Act, certified PEOs can now take predecessor or successor status when applicable, as well as enable their client to avail themselves of the employer credits that are available such as the Work Opportunity Tax Credit (WOTC) or Research and Development (R&D) credits.

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Ryan is an award-winning global tax services firm, with the largest indirect and property tax practices in North America and the sixth largest corporate tax practice in the United States. Headquartered in Dallas, Texas, the Firm provides a comprehensive range of state, local, federal, and international tax advisory and consulting services on a multi-jurisdictional basis, including audit defense, tax recovery, credits and incentives, tax process improvement and automation, tax appeals, tax compliance, and strategic planning. Ryan is a three-time recipient of the International Service Excellence Award from the Customer Service Institute of America (CSIA) for its commitment to world-class client service. Empowered by the dynamic myRyan work environment, which is widely recognized as the most innovative in the tax services industry, Ryan's multi-disciplinary team of more than 1,900 professionals and associates serves over 9,000 clients in more than 40 countries, including many of the world's most prominent Global 5000 companies. More information about Ryan can be found at www.ryan.com.

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SOURCE Ryan