Proposed guidance on disallowed QTF deduction

June 26, 2020

The IRS has proposed new regulations implementing changes to Sec. 274 that provide guidance to determine what qualified transportation fringe (QTF) expenses are not deductible and how to apply certain exceptions.

With regard to QTF parking expenses, the proposed regulations provide that if the taxpayer owns or leases all or a portion of one or more parking facilities, the disallowance may be calculated using a general rule or any one of three simplified methods.

The proposed regulations also address transportation and commuting expenses paid or incurred by the employer, which was added by the Tax Cuts and Jobs Act.

The proposed regulations specifically address the elimination of the deduction for expenses related to QTFs provided to an employee of the taxpayer. Learn the history and details here.

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