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The tax free limits for qualified transportation fringe benefits for 2010 will be same as in 2009 and continue through 2010.   Below is more information from IRS.  IRS also issued a 1-year extension on the use of smart cards and debit cards to provide qualified transportation fringes. However, employers and employees may rely on Revenue Ruling 2006–57 on the use of those cards with respect to transactions occurring prior to January 1, 2011.

2010 Qualified Transportation Fringe Benefit Levels

“.05 Section 1151 of ARRTA amended § 132(f)(2) of the Code to provide a temporary increase in the amount excludable from gross income for certain employer provided transportation fringe benefits. For months beginning after February 17, 2009, and before January 1, 2011, the monthly limitation under § 132(f)(2)(A) for transportation in a commuter highway vehicle and any transit pass is the same as the amount in effect under § 132(f)(2)(B) for qualified parking, which is $230 per month for 2009.”

Source: IRB 2009-16 (Rev. April 20, 2009) http://www.irs.ustreas.gov/pub/irs-irbs/irb09-16.pdf

In Publication 15-B, IRS says that that the 2010 limits are the same as in 2009.

“Exclusion from wages.   You can generally exclude the value of transportation benefits that you provide to an employee during 2010 from the employee’s wages up to the following limits.

• $230 per month for combined commuter highway vehicle transportation and transit passes.
• $230 per month for qualified parking.
• For a calendar year, $20 multiplied by the number of qualified bicycle commuting months during that year for qualified bicycle commuting reimbursement of expenses incurred during the year.”

Source: http://www.irs.gov/publications/p15b/ar02.html#en_US_publink1000193740

For guidance on the use of smart cards and debit cards to provide qualified transportation fringes:

Notice 2009–95

“This notice delays the effective date of Revenue Ruling 2006–57. Revenue Ruling 2006–57 provides guidance to employers on the use of smartcards, debit or credit cards, or other electronic media to provide qualified transportation fringes under sections 132(a)(5) and (f) of the Code. This guidance is intended to provide relief to mass transit providers that have been unable to update their present systems in order to comply with the Revenue Ruling guidelines prior to the current effective date of January 1, 2010. The effective date of Revenue Ruling 2006–57 is further delayed until January 1, 2011. Revenue Ruling 2006–57 is modified. Revenue Ruling 2006–57, 2006–2 C.B. 911, provides guidance to employers on the use of smartcards, debit or credit cards, or other electronic media to provide qualified transportation fringes under Internal Revenue Code §§ 132(a)(5) and 132(f). The ruling’s effective date was set for January 1, 2008. In 2007, however, Treasury and the IRS became aware that certain transit systems needed additional time to modify their technology and make it compatible with the requirements for vouchers set forth in Revenue Ruling 2006–57. Consequently, Treasury and the IRS delayed the effective date of Revenue Ruling 2006–57 until January 1, 2009. See Notice 2007–76, 2007–2 C.B. 735. In 2008, Treasury and the IRS further delayed the effective date of Revenue Ruling 2006–57 until January 1, 2010. See Notice 2008–74, 2008–38 I.R.B. 718. Certain transit systems need additional time to complete the process of adapting their technology to achieve compatibility with the requirements for vouchers. Therefore, the ruling’s effective date is further delayed until January 1, 2011. Nevertheless, employers and employees may rely on Revenue Ruling 2006–57 with respect to transactions occurring prior to January 1, 2011.”

See Revenue Ruling 2006-57, 2006-47 I.R.B. 911, available at www.irs.gov/irb/2006-47_IRB/ar05.html and Notice 2008-74, 2008-38 I.R.B. 718, available at www.irs.gov/irb/2008-38_IRB/ar09.html.

Source: IRB 2009-52 (Rev. December 28, 2009) http://www.irs.ustreas.gov/pub/irs-irbs/irb09-52.pdf