Iowa Legislature May Consider Commuter Benefits Changes in Next Session

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Jan. 4—Iowa's next legislative session may consider changes to commuter benefits that were adopted in a federal spending bill approved Dec. 18 by President Barack Obama, the state Revenue Department said Dec. 31.

Iowa conforms to the Internal Revenue Code in effect Jan. 1, 2015, which does not include changes made later in 2015, the department said.

The federal measure (Pub. L. 114-113) approved equal tax-free limits for transit passes, van-pool benefits and parking benefits, retroactive to Jan. 1, 2015, with parity permanently established. The transit and van-pool benefit had been $130 a month, but the new law allowed the benefit to be $250 a month in 2015 and $255 a month in 2016, equal to the maximum tax-free amount allowable for employer-provided parking. Retroactive parity was restored for tax year 2014 but its was not renewed and expired at the end of that year.

For tax year 2015, Iowa's tax-free transit and van pool benefit is to remain $130 for state tax purposes, and the parking benefit amount is to remain $250.

Iowa tax returns are to be filed in accordance with current state law, the revenue department said, adding that the effects of the federal spending bill “should not be included on Iowa returns at this time.”

If the Iowa legislature adopts the federal changes, online tax forms would be updated accordingly, the department said. The Iowa legislative session is to start Jan. 11.

To contact the reporter on this story: Caitlin Reilly creilly@bna.com

To contact the editor responsible for this story: Michael Trimarchi mtrimarchi@bna.com