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The Tax Cuts and Jobs Act includes a provision that denies businesses deductions related to qualified transportation fringe benefits. This includes qualified parking provided to employees by an employer. The result is a disallowance of the costs related to employee parking on the business's tax return. There is an exception to the disallowance for parking that is available to the general public. The IRS issued interim guidance which included information on how to compute any nondeductible parking expense in Notice 2018-99.

The AICPA made several recommendations to the IRS in its comment letter in response to IRS Notice 2018-99. Included in the AICPA's recommendations is a suggestion that parking meets the general public test in the following situation:

  • The taxpayer leases space in a multi-tenant building that includes access to a parking facility for all tenants;
  • The lease does not identify a specific number of spaces available to the taxpayer; and
  • The taxpayer's employees use less than 50% of all available spaces 

The IRS is expected to publish proposed regulations with additional guidance. We will continue to monitor this guidance and provide you with necessary updates.