An employee is submitting his monthly parking fee as a reimburseable expense. The parking space is at his normal work location. Is this taxable to the employee?


The answer is no, the parking fee would not be taxable to the employee, as long as it meets the IRS definition of "qualified parking" and does not exceed $190 per month (see Taxable and Non-taxable Income and Employer's Tax Guide to Fringe Benefits).

The IRS defines qualified parking as parking a company provides to its employees at or near its business premises. It includes parking on or near the location from which its employees commute to work using mass transit, commuter highway vehicles, or carpools. It does not include parking at or near the employee’s home. In other words, you may provide a benefit to your employees of paying for their parking at work, within limits, without it being counted as taxable income to the employees. This was confirmed to us by IRS agent Schroff (#100-5950) on July 6, 2004.

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