Parking fees no longer deducted from pre-tax pay
July 18, 2018
Myron Dosch, University of Alaska chief finance officer, provided the following summary of a
change in federal law concerning the deduction of parking fees from paychecks.
"The Tax Cuts and Jobs Act passed by Congress in December 2017 ushered in changes to tax rates and to deductions and benefits for employees and employers across the country. Earlier in calendar year 2018, most University of Alaska employees noticed more take-home pay in their paychecks as a result of tax rate changes.
The new law also has specific impacts to employer-provided transportation benefits, including how employee parking payroll deductions are treated. As a result, employees’ parking deductions will become an after-tax deduction on their paycheck rather than a pre-tax deduction. Biweekly paid employees will first see the effect of this required change on their Aug. 3 paycheck. The impact to each employee will vary depending on an individual's tax bracket and the amount paid for parking.
"The Tax Cuts and Jobs Act passed by Congress in December 2017 ushered in changes to tax rates and to deductions and benefits for employees and employers across the country. Earlier in calendar year 2018, most University of Alaska employees noticed more take-home pay in their paychecks as a result of tax rate changes.
The new law also has specific impacts to employer-provided transportation benefits, including how employee parking payroll deductions are treated. As a result, employees’ parking deductions will become an after-tax deduction on their paycheck rather than a pre-tax deduction. Biweekly paid employees will first see the effect of this required change on their Aug. 3 paycheck. The impact to each employee will vary depending on an individual's tax bracket and the amount paid for parking.
If there are any questions, please contact your local Parking Services or Human Resources office."
There will be no restriction on the maximum that can be deducted from each pay period, starting when the change is implemented Aug. 1.
Under the new rules, permits purchased with after-tax payroll deductions will be eligible for prorated refunds if returned to the Bursar’s Office before they expire. So, unlike previously, employees who leave the university can get a refund on any parking fees that have been deducted for time they won't use.
For more information, visit this link.