Cents-per-mile rule. The standard mileage rate you can use under the cents-per-mile rule to value the personal use of a vehicle you provide to an employee in 2005 is increased to 40.5 cents a mile. See Cents-Per-Mile Rule in section 3.

Employee stock options. Section 251 of the American Jobs Creation Act of 2004 provides that wages for social security, Medicare, and federal unemployment taxes do not include remuneration from exercising an incentive stock option or an employee stock purchase plan option after October 22, 2004, or from any disposition of stock acquired by exercising such an option. Federal income tax withholding is not required on income from a disqualifying disposition of stock acquired by exercising an incentive stock option or an employee stock purchase plan option after October 22, 2004, or on income from any disposition of stock acquired by exercising an employee stock purchase plan option after October 22, 2004, equal to the discount portion of stock acquired by exercising the option. See Employee Stock Options in section 2.

Increase in qualified parking exclusion and commuter transportation benefit. For 2005, the monthly exclusion for qualified parking increases to $200 and the monthly exclusion for commuter highway vehicle transportation and transit passes increases to $105. See Qualified Transportation Benefits in section 2.

This publication supplements Publication 15, (Circular E), Employer's Tax Guide, and Publication 15-A, Employer's Supplemental Tax Guide. It contains specialized and detailed information on the employment tax treatment of fringe benefits.