Free Parking? Not Necessarily – QTF and the Tax Cuts and Jobs Act
Originally published on March 6, 2019
Updated on October 31st, 2023
Businesses and nonprofits should expect changes when it comes to parking benefits.
The Tax Cuts and Jobs Act has amended Section 274 to limit or remove tax deductions for employers who provide qualified transportation fringe (QTF) benefits. Such benefits can include public transit passes, commuter transportation in a highway vehicle… and even use of a parking lot.
Under the new tax law, effective January 1, 2018, QTF benefits that involve on-site parking are no longer tax deductible. If your organization owns or leases a parking lot and your employees can use it, you must calculate the expense associated with maintaining that lot. You can use what the IRS calls “any reasonable method” to determine the cost of providing employee parking.
Be sure to contact your business tax CPAs to help with these calculations and other QTF benefit questions. You can also click here for additional detail provided to our nonprofit clients on determining the cost associated with parking lots.
All content provided in this article is for informational purposes only. Matters discussed in this article are subject to change. For up-to-date information on this subject please contact a James Moore professional. James Moore will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through this site.
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