The IRS has released the 2023 final version of its Publication 15-B (The Employer’s Tax Guide to Fringe Benefits).
The “What’s New” section of the publication includes information on the 2023 business mileage rate under the “cents-per-mile rule” (see Payroll Guide ¶3806), the monthly exclusion for qualified parking and commuter transportation benefits (see Payroll Guide ¶3585 and Payroll Guide ¶3590), and the contribution limit on a health flexible spending arrangement (FSA) (see Payroll Guide ¶3510).
There is a table on page 6 of the publication that summarizes the differences in the treatment of various fringe benefits for federal income tax withholding (FITW), Social Security and Medicare (FICA), and federal unemployment tax (FUTA) purposes. For example, payments from an employer’s adoption assistance plan that meet certain requirements are not subject to FITW. However, the payments are subject to FICA and FUTA tax.
Qualified parking exclusion and commuter transportation benefit. The monthly exclusion for qualified parking is $300, and the monthly exclusion for commuter highway vehicle transportation and transit passes is $300 in 2023 (see Payroll Guide ¶3560).
Contribution limits for health flexible spending arrangements (FSAs). A cafeteria plan may not allow employees to request salary reduction contributions to health FSAs greater than $3,050 in 2023.
Employers must generally determine the value of noncash fringe benefits no later than January 31 of the next year....
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