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Transit and Parking Administration

Qualified Transportation Plans allow employers to offer a tax break to employees with qualified transportation expenses related to their employment.

The following benefits may be offered on a pre-tax basis through a transportation plan:

Transit Passes

These include any pass, token, fare card, voucher or similar item entitling a person to transportation (or transportation at a reduced price) if it is encompasses mass transit facilities or is provided in a highway vehicle eligible for use in van pooling.

Van pooling

This means transportation to and from an employee‘s residence, but only if the transportation is in a “commuter highway vehicle” that seats at least six adults plus the driver. At least 80% of the vehicle‘s use should be for transporting employees between their homes and their jobs. Employees must use at least half of the seating capacity for such trips.

Qualified Parking

The Qualified Parking benefit enables the employee to pay for parking with pre-tax dollars if the parking facility is at or near the employer's business premises. It also includes parking at or near a location from which the employee commutes to work by mass transit, van pooling, in a commuter highway vehicle, or by car pool (parking at or near the employee's home does not qualify).

Bicycle Commuting Benefit

The Bicycle Commuting benefit is another type of commuter benefit that allows employees who ride bicycles to receive reimbursement for expenses as defined by Code § 132(f)(5)(F)(i) that are funded entirely by the employer. These reimbursements must be:

• For reasonable expenses;
• Incurred for the purchase, improvement, repair or storage of a bicycle;
• That is regularly used for travel between the employee’s residence and place of employment;
• If the reimbursement is paid during the calendar year in which the expenses are incurred or during the first three months after that calendar year.

Unlike the other Commuter Benefits offered under Code § 132, the Bicycle Commuting benefit's maximums are based on an annual, calendar-year basis, not to exceed $240 per calendar year. However, the actual limit is determined by multiplying $20 times the number of "qualified bicycle commuting months" the employee uses during each calendar year. A month is considered a "qualified bicycle commuting month" if:

• During that month the employee used the bicycle for a substantial portion of the travel between the employee's residence and place of employment; and
• For that month the employee did not receive any other qualified transportation fringe benefit (i.e. parking, vanpooling, or transit).

Please contact Medcom at sales@emedcom.net for more information about our Transit and Parking administrative services.
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