There are certain steps that you need to take when you use a Form W-2 to report income for employee transportation benefits.
- Step 1: Understand the exclusion rules of certain transportation fringe benefits
- Step 2: Do not report transportation benefits in your employee’s wages if their local transportation usage has little to no value
- Step 3: Use Box 14, marked “Other”, for applicable benefits
For 2026, the monthly exclusion for qualified parking is $340. The monthly exclusion for commuter highway vehicle transportation and transit passes is $340.
The IRS outlines that excluding an employee transportation expense should take place when accounting for it is unreasonable or impossible. Employers should further apply exclusions to benefits such as:
- A transit pass
- Qualified parking
- An employee who rides in a commuter highway vehicle between their home and workplace
Exclude qualified transportation fringe benefits from the general employee wage reporting even when you substitute typical pay for these benefits.
People Also Ask
- How do I report fringe benefits on a W-2 form? – First make sure that the fringe benefits for an employee are taxable, even though most do require you to report them. Enter the values of certain benefits in Boxes 1, 3, and 5 on W-2 forms.
- How do I report income from employee meal or lodging benefits on a W-2 form? – When it comes to employee meal or lodging benefits, treat that income as per diem expenses.
Enter payer information one time and import data from a variety of sources using our W-2/1099 Forms Filer software. Download our free 1099-etc Demo software today and eliminate the need to buy the usual pre-printed forms.