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Commuter Benefits

Commuter Benefits

The 1997 Taxpayer Relief Act and the 1998 Transportation Equity Act have provided employers with facilities in downtown urban locations the chance to provide a valuable employee benefit at little or no cost to the company. Section 132(f) of the Internal Revenue Code now allows employers to offer employees the choice to direct a portion of their salary into reimbursement accounts to pay for certain work-related parking or mass transit expenses on a pre-tax, salary reduction basis.

How does the plan work?

Before the start of the plan year, employees evaluate their needs and make an election to set aside a certain amount of their salary pre-tax to go into a parking and/or mass transit expense reimbursement account. Since the money you choose to put into these accounts is not considered taxable income, you save by paying less Federal, State and FICA taxes. You could save between $22.65 and $48.65 on every $100 you choose to defer into these accounts. Under current Federal law, the following amounts may be contributed to the accounts to reimburse employees for qualified transportation expenses. Funds cannot be comingled or transferred between accounts.

  • 2018 Parking Expense Account - $260 / Month
  • 2018 Mass Transit Expense Account - $260 / Month

Benefit Strategies, LLC provides a FLEXEXPRESS© card that looks and works like a typical debit card, making the process as easy as possible. There are no up-front payments, and charges are automatically deducted from your account. Transit passes should be bought online or at the point of service with the debit card. No manual claims can be submitted for the transit account. If a parking vendor does not accept Master Card Visa, you can still submit a manual claim to us for quick reimbursement. We guarantee prompt processing for all completed parking claims.

Election changes

Elections cannot be changed during the active month, if changes need to be made the participant must submit a status change form. This form must be received by the 10th day of the month prior to the election change. The new election will be effective on the first day of the month following the processed change. This election will remain in effect until the participant submits a status change form.

Qualified Transportation Expenses

Parking expenses include:

  • Parking a vehicle in a facility that is near the employees' workplace.
  • Parking at a location from where the employee commutes to work. (i.e. the cost of parking in a lot at the train station so the employee can commute in on the train.)

Mass Transit expenses include:

  • The cost of any pass, token, fare card, voucher, or other item that entitles the employee to use mass transit for the purpose or traveling to or from his/her place of work.

Transit may be via:

  • A mass transportation system.
  • A private mass transit enterprise conducted by a company or individual that is in the business of transporting people in a "commuter highway vehicle." Such a vehicle must have a seating capacity for six or more adults and at least 80 percent of the vehicles mileage must be from transporting employees to and from their place of work.