The IRS has addressed many aspects of tax treatment for qualified transportation benefits provided by employers. The information letter focuses on the use of smartcards, transit passes and qualified parking, in addition to the tax treatment of such passes and parking that employers provide by crediting employee’s smartcards.

By definition:

A “transit pass” is any pass, token, farecard, voucher, or similar item (including an item exchangeable for fare media) that entitles a person to transportation on mass transit facilities [Code § 132(f)(5)(A)].

“Qualified parking,” is parking that is located on or near the employer’s business premises or on or near a location from which the employee commutes to work via mass transit or commuter highway vehicle [Code § 132(f)(5)(C)].

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