IRS Delays Effective Date for Smart Card Requirements

The IRS has delayed – again – the effective date of Revenue Ruling 2006-57, which confirmed that employers could use debit, credit or smart cards to deliver qualified transportation fringe benefits and outlined the required procedures for doing so. The ruling was supposed to take effect Jan. 1, 2008, but was delayed for a year to give transit systems more time to implement the required technology. Apparently some transit systems are still not ready. The revenue ruling is now slated to take effect Jan. 1, 2009, but employers and employees may rely on the ruling in the meantime.

Qualified transportation fringe benefits include transit passes, qualified parking and the cost of transportation in a commuter highway vehicle between home and work. For 2008, the monthly limit for commuter vehicles and transit passes is $115, and the limit for qualified parking is $220.