The following information was copied from this link: http://www.nctr.usf.edu/programs/clearinghouse/commutebenefits/
Qualified transportation fringe benefits (Section 132(f) of the Internal Revenue Code) or “Commuter Tax Benefits” are like money in the bank. Employers save on payroll related taxes. Employees save on federal income taxes.
In 2013, under the fiscal cliff deal, Congress changed the effective date of Qualified Transportation Fringe Benefits (Section 132(f)) and extended its end date through December 31, 2013. The American Taxpayer Relief Act of 2012 now provides the option for most employers to provide transit and vanpool tax free benefits to their employees up to $245* per month. Previously, under the American Taxpayer Relief Act of 2012, employers may provide workers with up to $240 per month in tax-free transit and commuter highway vehicle (e.g., vanpool) benefits. The Act made this change effective as of January 1, 2012.** Prior to this change, the maximum level for transit and vanpool benefits was $125 per month for 2012
The monthly limitation under Section 132(f)(2)(A) Qualified Transportation Fringe Benefits regarding the aggregate fringe benefit exclusion amount for vanpools (commuter highway vehicles) and transit passes is $245. The monthly limitation under Section 132(f)(2)(B) regarding the fringe benefit exclusion amount for qualified parking is $245. Commuters can receive both the transit and parking benefits (i.e., up to $490 per month). Employers can allow employees to use pretax dollars to pay for transit passes, vanpool fares and parking but not for bicycle benefits.
Employers that subsidize at least $30 per month for transit or vanpool fares may meet the National Standard of Excellence and qualify for designation under NCTR’s Best Workplaces for Commuters.