What is the qualified parking limit for tax-free income?

The qualified parking limit for tax-free income is an important aspect of the tax code that benefits employees using employer-provided parking facilities. The correct answer indicates that the limit is set at $260 per month for the year 2023. This figure reflects the maximum amount that can be excluded from an employee's taxable income for qualified parking benefits, meaning that employers can provide this amount as a pre-tax benefit to employees without it being subject to income tax.

Each year, the Internal Revenue Service (IRS) reviews and adjusts the limits for various fringe benefits to account for inflation or changes in economic conditions, which is why it's important to stay updated on these figures each year. Understanding the limit is critical for payroll professionals to ensure compliance with tax regulations and to effectively manage employee benefits.

Other numbers provided in the choices do not reflect the current limit set by the IRS for the tax year in question. Therefore, recognizing the correct figure is key to ensuring accurate payroll processing and minimizing potential tax liability for both the employer and the employees.