Nicole's employer pays her $150 per month towards the cost of parking near a railway station where Nicole catches the train to work. The employer also pays the cost of the rail pass, $75 per month. Nicole can exclude both of these payments from her gross income
a. True
b. False
Indicate whether the statement is true or false
True
RATIONALE: The parking and the rail pass are considered qualified transportation fringe benefits and can be excluded from Nicole's gross income. If the parking were not excludible as a qualified transportation fringe, the amount would be includible in Nicole's gross income because it is a nondeductible commuting expense. The cost of the rail pass would not be deductible for the same reason. Both of these amounts are below the statutory monthly ceiling, as adjusted annually for inflation.
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