N.J. Admin. Code § 18:35-7.8

Current through Register Vol. 56, No. 11, June 3, 2024

Section 18:35-7.8 - Commuter transportation benefits reporting by employer

(a) Pursuant to 54A:7-2, an employer shall provide an employee with a written statement as prescribed by the Director in (g) below showing the cost of commuter transportation benefits paid by the employer to the employee.

(b) Employer-provided commuter transportation benefits for using an alternate form of commuting (such as public transportation, carpools, etc.) are excluded from New Jersey gross income up to and including the limit per taxable year per employee. The limit per taxable year is as follows:

1. $ 2,760 for the taxable year beginning on and after January 1, 2010, but before January 1, 2011;

2. $ 2,760 for the taxable year beginning on and after January 1, 2011, but before January 1, 2012;

3. $ 2,880 for the taxable year beginning on and after January 1, 2012, but before January 1, 2013;

4. $ 2,940 for the taxable year beginning on and after January 1, 2013, but before January 1, 2014;

5. $ 3,000 for the taxable year beginning on and after January 1, 2014, but before January 1, 2015;

6. $ 3,000 for the taxable year beginning on and after January 1, 2015, but before January 1, 2016; and

7. The Director shall adjust the limit for inflation in parallel with the adjustment pursuant to I.R.C. § 132(f)(6), so that the taxable year limit pursuant to this paragraph is equal to 12 times the adjusted Federal monthly limit pursuant to I.R.C. § 132(f)(2)(A). Notice of the adjusted limit shall be published in the New Jersey Register.

(c) The income tax exclusion shall not apply to any commuter transportation benefit unless such benefit is provided in addition to and not in lieu of any compensation otherwise payable to the employee.

(d) State and local government employers may offer qualified transportation fringe benefits to their own employees as an employee set-aside program. The State and local employees shall choose to have the benefit deducted from their salary, receive any combination of benefits, or continue to receive the amount as salary. The amount of any reduction will continue to be treated as regular compensation for purposes of the calculation of pension contributions and the amount of any retirement allowance, but, to the extent permitted under the Federal Internal Revenue Code as extended under the Federal Transportation Equity Act for the 21st Century, will not be included in the computation of Federal taxes withheld from the employee's salary.

(e) The value of qualified parking, as provided under I.R.C. § 132, at or near the employer's business premises or a location from which the employee commutes to work by mass transit or hired commuter vehicle is excludible for New Jersey gross income tax purposes. Commuter transportation benefits also include the cost of parking by employees at park-and-ride lots. Any parking on or near the employee's residence is not qualified parking.

1. Acceptance of the cash value of qualified parking on the part of one employee of an employer in place of qualified parking fringe benefits provided to the other employees of the employer in addition to and not in lieu of compensation, shall not cause the qualified parking fringe to become a taxable benefit for employees who did not accept the cash value.

(f) The written statement required to be provided by the employer to the employee as set forth in (a) above may be set forth on Form W-2 or other written information statement showing the amount of such benefits.

N.J. Admin. Code § 18:35-7.8

Amended by 48 N.J.R. 295(a), effective 2/16/2016