How Do I Report Income from Employee Parking Benefits on a W-2 Form?

Did your business pay more for your employees’ parking than the monthly exclusion limitation? Treat any excess amount as compensation to the employee. Include that compensation on your employee’s Form W-2. These are specific circumstances when you do not treat what you pay to a third party for employee parking as a disallowed expense. The amount that you enter in Box 1 on your employee’s W-2 form becomes deductible compensation and a part of their wages. The amount will encounter federal income tax withholding, along with FICA and FUTA taxes. Do not exclude the excess as a de minimis fringe benefit from your employee’s wages.

Report income from employee parking benefits on a W-2 form using our W-2/1099 Forms Filer software that supports up to 99,999 employees per payer. Download our free demo software to use our core product or build an accounting suite that supports your business’s needs.

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