[November 26, 2002]

Effective January 1, 2003, the Federal limit for pretax parking expenses paid by payroll deduction will increase from $185 to $190 a month. The pretax deduction limit for the combined value of transit passes and vanpooling expenses will remain at $100 a month.

The State of California has also conformed to the Federal limits for pretax transportation expenses (Revenue and Taxation Code Section 17144.5). Effective January 1, 2003, parking deductions of up to $190.00 a month and deductions of up to $100 a month for the combined value of transit passes and vanpooling will be taken on a pretax basis for State withholding purposes. Previously, the State did not allow pretax deductions for parking expenses, but there was no deduction limit for transit passes and vanpooling.

The new limits will be effective with paychecks issued on or after January 1, 2003. If you have any questions, please check with the person in your department who handles payroll and related matters. An updated Universitywide Factsheet on the Pretax Transportation Program will be issued early next year, and will be available online in the "Forms and Publications" section of this website.

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