2012 Retroactive Transit Pre-Tax Increase (Need revised W2?)

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2012 Retroactive Transit Pre-Tax Increase (Need revised W2?)

Postby Userdc » Thu Jan 31, 2013 12:30 pm

A little history for those care:

For years, the IRS has allowed you to exclude certain qualifying commuting expenses for mass transit and parking costs if your employer sets up a way to have these funded through a payroll deduction. The monthly limit is adjusted annually for inflation, and historically the pre-tax limit has been the same for both parking and mass transit.

That changed in 2012, when for some reason the pre-tax limit for mass transit was lowered to $125, while the parking exclusion limit remained at $240.

So for 2012, I continued to fund the entire cost of my monthly commuter rail ticket through payroll deduction, but since my pass costs more than $125, the remainder was deducted with post-tax dollars.

Fast-forward to the latest budget deal, and they "fixed the glitch" and restore parity to transit and parking for 2013 (up to $245). I knew all that, but what I just found out today is that they ALSO restored parity for 2012 and retroactively increased the transit limit to $240 for 2012.

The problem is, how do I take advantage of this? My W2 reflects the higher taxable income in box 1, so do I need to request a revised W2?
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Re: 2012 Retroactive Transit Pre-Tax Increase (Need revised

Postby hlfo718 » Thu Jan 31, 2013 2:27 pm

Yes, you need to get a revised W2. My company is reissuing the W2 because of this. If you max out X your tax rate, is a sizable amount.
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Re: 2012 Retroactive Transit Pre-Tax Increase (Need revised

Postby Calm Man » Thu Jan 31, 2013 6:58 pm

I think that you are cutting it too fine as a few hundred dollars might come out to $10 per pay period. Why don't you just leave it alone? Maybe you'll be overwithheld by a few hundred dollars but interest rates are zero on cash anyway and even if 2% it would be $5 a year.
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Re: 2012 Retroactive Transit Pre-Tax Increase (Need revised

Postby Userdc » Fri Feb 01, 2013 12:49 am

hlfo718 wrote:Yes, you need to get a revised W2. My company is reissuing the W2 because of this. If you max out X your tax rate, is a sizable amount.


Thanks, that's what I thought. I'll reach out to my payroll department.

Calm Man wrote:I think that you are cutting it too fine as a few hundred dollars might come out to $10 per pay period. Why don't you just leave it alone? Maybe you'll be overwithheld by a few hundred dollars but interest rates are zero on cash anyway and even if 2% it would be $5 a year.


This is not about over withholding, it's about how much I pay in taxes. If I get a revised W2, I will get a refund for an extra $500. I don't see any way to do that otherwise.
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Re: 2012 Retroactive Transit Pre-Tax Increase (Need revised

Postby Calm Man » Fri Feb 01, 2013 8:47 am

Userdc wrote:
hlfo718 wrote:Yes, you need to get a revised W2. My company is reissuing the W2 because of this. If you max out X your tax rate, is a sizable amount.


Thanks, that's what I thought. I'll reach out to my payroll department.

Calm Man wrote:I think that you are cutting it too fine as a few hundred dollars might come out to $10 per pay period. Why don't you just leave it alone? Maybe you'll be overwithheld by a few hundred dollars but interest rates are zero on cash anyway and even if 2% it would be $5 a year.


This is not about over withholding, it's about how much I pay in taxes. If I get a revised W2, I will get a refund for an extra $500. I don't see any way to do that otherwise.


Sorry, I misunderstood. I didn't realize your W2 was wrong, I thought you were referring to going forward. They have to correct it if it is wrong. I assume you are not the only one in this situation.
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Re: 2012 Retroactive Transit Pre-Tax Increase (Need revised

Postby scrabbler1 » Fri Feb 01, 2013 2:06 pm

Back in the late 1990s, I received an incorrect W-2 form. I showed my payroll division how it was wrong and they printed up a new one for right away. It wasn't a huge mistake but it was not in my favor so I was not going to let it slide. All in all, pretty simple.
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Re: 2012 Retroactive Transit Pre-Tax Increase (Need revised

Postby Zytos » Fri Feb 01, 2013 2:43 pm

Userdc wrote:A little history for those care:

For years, the IRS has allowed you to exclude certain qualifying commuting expenses for mass transit and parking costs if your employer sets up a way to have these funded through a payroll deduction. The monthly limit is adjusted annually for inflation, and historically the pre-tax limit has been the same for both parking and mass transit.

That changed in 2012, when for some reason the pre-tax limit for mass transit was lowered to $125, while the parking exclusion limit remained at $240.

So for 2012, I continued to fund the entire cost of my monthly commuter rail ticket through payroll deduction, but since my pass costs more than $125, the remainder was deducted with post-tax dollars.

Fast-forward to the latest budget deal, and they "fixed the glitch" and restore parity to transit and parking for 2013 (up to $245). I knew all that, but what I just found out today is that they ALSO restored parity for 2012 and retroactively increased the transit limit to $240 for 2012.

The problem is, how do I take advantage of this? My W2 reflects the higher taxable income in box 1, so do I need to request a revised W2?


Were the after-tax deductions for the amount in excess of $125 noted on your 2012 W2? Mine were not (I simply paid the difference on my own, from my credit card) and therefore my payroll department is saying that there is therefore nothing to correct on their W2. Am I SOL?
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Re: 2012 Retroactive Transit Pre-Tax Increase (Need revised

Postby nhawrylyshyn » Thu Mar 28, 2013 1:49 pm

Zytos wrote:
Userdc wrote:Were the after-tax deductions for the amount in excess of $125 noted on your 2012 W2? Mine were not (I simply paid the difference on my own, from my credit card) and therefore my payroll department is saying that there is therefore nothing to correct on their W2. Am I SOL?


Did you ever get happen to find out about this or does anyone have any further help ?

I am in the same situation. I paid the excess of the pre tax limit $125 on my Credit Card so I did not and won't receive an adjusted W-2 from my firm.

Many thanks.
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