Did you catch the little detail in all the PATH (Protecting Americans from Tax Hikes Act) documentation about the parity between transit benefits and parking benefits? Yes, that’s right – it was made retroactive to January 1, 2015!
If you have not made this adjustment yet, please make sure you do it soon! There are a few steps involved. First, make sure that you can identify all your employees’ pre- and post-tax transit benefits by month. Then create a macro or statement in EXCEL (or other calculation program) to identify the difference between $130 (the original monthly amount) and $250 (the parity-adjusted amount for 2015). This will affect only those who had pre-and post-tax deductions, of course.
You’ll need to arrive at: a revised pre-tax deduction amount for each month and the year; a refund amount for any Social Security and Medicare deducted based on the original post-tax deductions; revised Federal taxable wages, and state taxable wages, if applicable. Then you’ll be able to create new W-2 Forms or create W-2C’s for your employees.
This is not a small task, but with a clear idea of all the steps, it can be done.
Need help? We can assist. Contact us for a lifeline!