Our small business online advice columnist. CCH Online Store Books on small business topics. Free E-mail Newsletter Monthly updates on developments affecting small businesses. A commuter highway vehicle is any highway vehicle that seats at least six adults, including the driver. Also, you must reasonably expect that at least 80 percent of the vehicle mileage will be for transporting employees between their homes and the work place.
Mass transit can be a publicly or privately operated bus, rail, or ferry service.
It doesn't include parking on or near your employee's residence. If you provide a qualified transportation fringe benefit to an employee in place of compensation, you can't exclude the amount from the employee's income, except in the case of qualified parking. Amazingly, this is true even if your state or local laws require you to offer your employees a choice of receiving the benefit or higher compensation. In that case, you may be able to exclude all or part of the benefit under the other fringe benefit rules. Finally, there are limitations on the amount you can exclude from your employee's wages for qualified transportation fringe benefits.