Remember the Parking Lot Tax? IRS Issues Proposed Regulations on Post-TCJA Qualified Transportation Expenses
The IRS has returned to the issue of qualified transportation fringes, including more detailed guidance on the implementation of the “parking lot tax,” in proposed regulations.[1] The parking lot tax portion of the regulations build on the safe harbor calculation the IRS provided in Notice 2018-99, adding two additional simplified computations for disallowed parking costs.
The regulations cover any qualified transportation fringe which is defined as any of the following:
Transportation in a commuter highway vehicle if such transportation is in connection with travel between the employee’s residence and place of employment (as described in sections 132(f)(1)(A) and 132(f)(5)(B));
Any transit pass (as described in sections 132(f)(1)(B) and 132(f)(5)(A)); or
Qualified parking (as described in sections 132(f)(1)(C) and 132(f)(5)(C))[2]