Section 132 - Parking & Transit Benefits
A Qualified Transportation Fringe Benefit Plan allows you to set aside “pre-tax” dollars to pay for qualified employment-related transportation and commuter parking expenses.
There are two qualified transportation benefits:
Qualified Parking - Expenses for parking at or near the employer’s business premises or parking at or near a location from which an employee commutes to work by mass transit, vanpooling, carpool, etc.
Transit Passes and Vanpooling - Expenses for any pass, fare card or similar item that entitles the employee to transportation on a mass transit system to and from work or for the cost of transportation between the employee’s place of residence and place of employment in a commuter vehicle that has a seating capacity of 6 persons or more (not including the driver) where at least 80% of the mileage used for the year is for the purpose of transporting employees to their place of employment.
Using the Transportation Benefit
To participate in the plan, you simply estimate your qualified transportation expenses for the year, complete an Election Form indicating your estimated monthly expense(s) and submit it to your employer. Each pay period, your employer will deduct the appropriate pre-tax amount from your paycheck and credit your Parking and/or Transit Reimbursement account. You can then use the funds from these accounts to pay for your eligible transportation expenses by paying with your myFlexResource debit card. You can also order transit passes through our secure myFlexResource web portal have them mailed directly to you each month.
The IRS has placed monthly pre-tax contribution and reimbursements limits on Parking and Transit Expenses. Employees may participate in one or both accounts. Benefits are excluded from federal income and payroll taxes, and most state taxes, up to the monthly limits. The current 2013 monthly limits – $245 each for parking and transit/vanpooling.
The Importance of Planning
Unlike Flexible Spending Accounts, your Parking and Transit contribution amounts can be modified from month to month as your needs change. Unused contributions in your Parking and Transit accounts carry forward indefinitely to be used for future expenses as long as you remain with your current employer. Upon termination, balances in your account may only be used to reimburse expenses incurred prior to your termination.