Parking and Parity in the House

The House of Representatives passed the Tax Increase Prevention Act of 2014, HR 5771.  This bill has a direct effect on payroll. In 2013 we lost the parity of transit passes and parking limits because Congress didn’t get it done.  Now they are trying to make up for lost time by putting the parity back into this bill for at least 2014. Unfortunately for payroll Congress still doesn’t understand that April 15th and December 31st are not interchangeable.  Every time they try to correct things and retro back tax breaks they think they just have to do it by April 15th and all is okay.  This bill has only just passed the house and it calls for the parity to be retroactive back to January 1, 2014.  We still have to have the Senate pass the same bill, have it go through the House and Senate Conference committee to iron out any differences, re-vote on the bill and then, if passed, get it to the President to sign.  Will they get it done by December 20th so most of use will have at least one payroll to process?  They didn’t in 2012.  In 2012 a similar bill was passed on January 1, 2013 (the legislative day was actually December 30, 2012) and signed by President Obama on January 2, 2013.  Just two days short for payroll.  Fortunately the IRS came to the rescue for most employers (and their own staff) with guidance for handling the situation by issuing Notice 2013-8.  This guidance helped avoid a massive amount of Forms W-2c for most employers.  If the same thing occurs again for 2014, it appears the IRS will issue the same guidance.  We just have to wait and see.  But this is a heads up that you need to prepare for this as it looks like the Senate may pass the same bill as well.  We will keep you posted.

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