Transit Reimbursement Account
Employers with operations in major metro areas often have employees who incur significant transit or parking costs. Section 132 of the Internal Revenue Service code allows for employees to exclude much of these costs from their taxable income including:
Under Section 132, employers save the employer share of FICA taxes on dollars that are used for qualified commuting expenses. For each employee under the FICA limit who spends $2,760 per year on transit expenses, the employer will save over $207. In short, this means that the Federal Government helps employers to offer this program to their employees. And, if the same employee who spends another $2,760 on parking (Park & Ride for instance) per year on parking expenses, the employer will save a total of $414! These savings can really add up over your entire employee population and mitigate the administrative costs of the program. Unlike a Flexible Spending Account, discrimination testing is not required.
Happier Employees
In addition to being able to provide a federally subsidized employee benefit, employees also appreciate employers who help them save time and money on their commute. Benesyst’s online ordering system and convenient home delivery will steadily boost employee participation. Public Support for Commuter Plans is on the Increase
With the passage of the American Recovery and Reinvestment Act of 2009, the monthly tax-free benefits employers can provide for transit has been increased to equal the benefit for parking.
Reducing Your Carbon Footprint!
Employers offering Pre-Tax Commuter plans encourage the use of energy-efficient public transportation by their employees. Using public transportation is one of the most effective ways to reduce greenhouse gases. According to a September 2007 study by SAIC, titled Public Transportation’s Contribution to US Greenhouse Gas Reduction, taking public transportation is a very effective way to reduce a household’s carbon footprint.
Participant Advantages
Employees do not pay income, Social Security or FICA taxes on money that is used to pay for commuting expenses. Assuming a combined tax rate of 40%, an employee can save more than $1,104 per year on transit expenses of $2,760. They can save another $1,104 per year on parking expenses of $2,760. That's like getting 4 months for free!
Benesyst Online Pre-Tax Commuter Administration
Benesyst’s Transit Reimbursement Administration allows the participant to purchase their transit pass or pay their parking provider directly online. We work with transportation providers and parking companies nationwide and have more than 100,000 individual products available. We're sure to be able to meet the needs of all of your employees.
The are no annual elections - employees can participate any month. Eligible employees just go to the Benesyst account portal to login prior to the 10th of the MONTH BEFORE they need a transit product.
Transit passes
Participants will be able to select their particular metro area, transit provider and transit product. They can even set their purchase to automatically re-occur each month. The Transit pass arrives at the employee’s home before the 1st of the month.
Qualified Parking
Participants in Qualified parking can pay their parking provider directly (ideal for monthly contracts), or order a ParkCheck payable to the parking provider (ideal for those that do not park everyday or park in multiple locations).
What Qualifies for Transit Reimbursement?
Qualified Parking Expenses
Parking at or near the employer’s business location or parking at or near a location from which the employee commutes to work via mass transit (park & ride).
Transit Passes and Fare Card Costs
A transit pass is any pass, token, fare card, voucher, or similar item entitling a person to ride, free of added charges or at reduced rates, on one of the following:
- Mass transit: Bus, rail, subway, light rail or ferry, publicly or privately operated
- Van Pools: A vehicle that meets Section 132 Vanpool requirements.
Commuter Highway Vehicle
Any highway vehicle that seats at least 6 adults (not including the driver) where it is reasonably expected that at least 80% of the vehicle’s mileage will have transpired in transporting employees between their homes and work.