Prior to the enactment of ATRA, the maximum pre-tax contribution for these modes of transportation was $125 for 2012 and 2013. ATRA increased this amount for 2012 to $240 and for 2013 to $245.
On January 16, the IRS issued Notice 2013-8, establishing special administrative procedures for employers to reimburse employees for taxes paid on transit expenses between $125 and $240 paid during 2012. The Notice also offers instructions on how to adjust Forms 941 and W-2. Employers are urged to consult with their payroll providers in order to determine how Notice 2013-8 applies to them.