On October 31, 2013 the Internal Revenue Service (IRS) announced new limits for pre-tax contributions and reimbursements on Commuter Benefits Accounts. These limits reflect the maximum allowed pre-tax contribution and reimbursement amounts per calendar month for 2014. These new limits will take effect January 1, 2014.
- Transit Account: Decreased from $245 to $130 per month
- Parking Account: Increased from $245 to $250 per month
If your Plan allows the current maximum or, for Transit, any amount that exceeds the new $130 limit, ADP will automatically update your Commuter Benefits account to the new 2014 limits.
If your Plan allows less than the new 2014 maximums, your existing plan limits will not be changed unless ADP is specifically directed by you to change your Plan limits.
IMPORTANT INFORMATION ABOUT THE TRANSIT LIMIT DECREASE
The American Taxpayer Relief Act (ATRA) of 2012 along with the annual inflation adjustment temporarily increased the monthly pre-tax reimbursement limit for Commuter Benefit Transit accounts to $245 per month resulting in parity with parking benefits. Under the ATRA provision the parity with parking expires on December 31, 2013. At present, there has been no indication that the parity with parking will be extended beyond December 31, 2013. Therefore, unless Congress acts to the contrary, as of January 1, 2014, the monthly pre-tax reimbursement limit for Transit accounts will be reduced to $130.
The purchase of transit passes to be used in January 2014 will take place with the December 2013 ordering cycle. All transit plan limits will be updated to the 2014 pre-tax maximum of $130 by November 8, 2013. Participants placing orders for January 2014 in December 2013 may only receive the reduced maximum reimbursement of $130. The reduced limit must be applied to this ordering cycle because the passes will be used in January 2014, after the December 31, 2013 deadline. Any participants placing orders over the $130 pre-tax limit for the January 2014 benefit month should expect to have these amounts taken via a post-tax payment method (e.g.. post-tax payroll deduction/contribution or personal credit card).
We are closely monitoring any legislative developments that could increase the $130 limit and will keep you apprised of any changes.
If you have any questions regarding the Commuter Benefits Transit reimbursement limits contact the DC Department of Human Resources Benefits Team at [email protected] or (202) 442-7627.