Employee Benefits-IRS Delays Effective Date Of Rules For Use Of Smartcards, Etc. to Provide Qualified Transportation Fringes

In Notice 2010-94 (the “Notice”), the Internal Revenue Service (the “IRS”) delays the effective date of Revenue Ruling 2006-57 (the “Ruling”). The Ruling provides guidance to employers on the use of smartcards, debit or credit cards, and other electronic media to provide qualified transportation fringes under Sections 132(a)(5) and (f) of the Internal Revenue Code. The Notice delays the effective date of the Ruling from January 1, 2011 for one year, until January 1, 2012. This delay is intended to provide additional time for certain transit systems to adopt their technology to satisfy the Ruling’s requirements for vouchers. However, employers and employees may rely on the Ruling with respect to transactions occurring prior to 2012.