IRS delays implementation of transportation debit/smart cards
Qualified transportation fringe benefits means (1) transportation in a commuter highway vehicle, such as car or van pooling, between home and work, (2) any transit pass, and (3) qualified parking. The amount of the fringe benefit which may be excluded from gross income and wages for 2007 is limited to $110 per month for the aggregate of transportation in a commuter highway vehicle and transit passes, and $215 per month for qualified parking.
Some transit systems have indicated they may need additional time to modify their technology to make it compatible for use with the cards. In order to provide more time for transit systems to participate in the program, the ruling's effective date, which was set for January 1, 2008, has been delayed to January 1, 2009.
Employers that wish to rely on Revenue Ruling 2006-57 with respect to transactions occurring prior to January 1, 2009 may do so.