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What is the Applicable Annual Limitation? A Comprehensive Guide
Definition & Meaning
The applicable annual limitation refers to a specific monetary cap set by employers for reimbursing employees for reasonable expenses related to bicycle commuting. This includes costs associated with purchasing bikes, equipment, repairs, and storage, provided the bicycle is a significant part of the employee's commute for at least one month within the calendar year. For each qualified month of bicycle commuting, the annual limitation is set at $20. This amount does not adjust for inflation. A qualified month is defined as any month in which the employee uses a bicycle for a substantial portion of their travel between home and work, without receiving other transportation benefits like transit passes or parking reimbursements.
Table of content
Legal Use & context
This term is primarily used in the context of employment law and tax regulations. It is relevant for employers who offer bicycle commuting benefits as part of their employee compensation packages. Understanding the applicable annual limitation is crucial for compliance with tax laws and for ensuring that employees receive the appropriate reimbursements for their commuting expenses. Users can manage related forms and documentation through resources like US Legal Forms, which provide templates for reimbursement requests and employer policies.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
(hypothetical example) An employee uses their bicycle to commute to work for five months in a calendar year. They can claim a reimbursement of $100 ($20 for each of the five months) for their commuting expenses, provided they do not receive any other transportation benefits during those months.
Comparison with related terms
Term
Description
Difference
Qualified Transportation Benefits
General category of benefits for commuting costs.
Applicable annual limitation specifically pertains to bicycle commuting.
Commuter Benefits
Broader term that includes various forms of transportation.
Applicable annual limitation is limited to bicycle-related expenses.
Common misunderstandings
What to do if this term applies to you
If you are an employee who regularly bikes to work, keep track of your commuting months and any related expenses. To claim your reimbursement, submit a request to your employer that outlines your qualified months and expenses. If you need assistance, consider using US Legal Forms to access templates for reimbursement requests. If your situation is complex, seeking advice from a legal professional may be beneficial.
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