For federal income tax purposes, an exclusion from gross income is available for the value of certain transportation benefits provided by an employer to an employee. For 2009, the amount that may be excluded from an employee's wages is limited as follows:
- For combined commuter highway vehicle transportation and transit passes:
- $120 per month for the months of January and February 2009 and
- $230 per month for the months of March through December 2009.
- $230 per month for qualified parking.
- $20 per qualified bicycle commuting month.
Wisconsin does not follow all provisions of the above federal exclusion for employer-provided transportation benefits. For Wisconsin tax purposes, the amount that may be excluded from an employee's wages for 2009 is limited as follows:
- $120 per month for combined commuter highway vehicle transportation and transit passes.
- $230 per month for qualified parking.
The exclusion for qualified bicycle commuting does not apply for Wisconsin.
Employers must either (1) include the amount that is taxable for Wisconsin purposes (but not taxable for federal purposes) in Box 16 of the Form W-2, or (2) provide employees with a supplemental "Wisconsin only" Form W-2 with the taxable benefits shown in Box 16.
Individuals filing Form 1 or 1NPR should use Wisconsin Schedule I,
Adjustments to Convert Federal Adjusted Gross Income and Itemized Deductions to the Amounts Allowable for Wisconsin, to adjust for the difference between the Wisconsin and federal income tax treatment of transportation benefits. Individuals filing Form 1A should fill in the adjusted Wisconsin wages on line 1 of Form 1A.
December 14, 2009