IRS Issues Guidance Regarding Retroactive Increase in Excludible Transit Benefits

The recently enacted Consolidated Appropriations Act, 2016 retroactively increased the 2015 limit on the monthly exclusion from income for employer-provided transit and vanpooling benefits under Section 132(f)(2)(A) of the Internal Revenue Code from $130 to $250. The IRS published Notice 2016-6 on January 11, 2016, to (1) clarify how the retroactive increase applies for 2015 and (2) provide a special administrative procedure for employers who over-withheld income taxes and FICA taxes on transit benefits provided during any quarter of 2015 and who want to make corrections on the fourth-quarter 2015 Form 941 (Employer?ÇÖs Quarterly Federal Tax Return) (which is due February 1, 2016). Notice 2016-6 is available?áhere.