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Commuter Benefit Accounts Commuter benefits accounts are one of the highly valued voluntary benefits now being offered by many employers through take care. These accounts offer employees up to 40% tax savings on work-related travel expenses. They are part of a transportation benefit offered under IRS Code 132. This code allows employees to pay for qualified travel expenses on a pre-tax basis, eliminating federal, state and social security taxes. Use Commuter Benefits Accounts for Work Related Travel Costs There are some limitations to how commuter benefit accounts can be used. The IRS puts a maximum limit on how much can be spent each month for such expenses, as well as which expenses qualify for reimbursement. There are several categories of qualified expenses, including mass transit and parking. Reimbursements for mass transit monthly expenditures are limited to $105 each month. Expenses that qualify include transit passes, such as tokens, fare cards, vouchers or other such items used for mass transit travel. Commuter benefit accounts can be used to reimburse parking expenses up to $205 a month, and include monthly parking passes as well as parking meter fees. To qualify, expenses must be incurred for parking a vehicle near a place of employment or a location from which one commutes to work via mass transit or carpool. One of the easiest ways to pay for these qualified expenses is through flexible spending commuter benefits accounts. Money is deducted directly from each paycheck on a pre-tax basis for qualified expenses each month. Depending on the charges, a debit card can be used to pay for such items at the point of purchase or a claim can be filed and reimbursement will be made. |
Additional Topics Consumer-Directed Health Plans Consumer-Driven Health Accounts Dependent Care Flexible Spending Accounts Flexible Health Spending Accounts Flexible Medical Expense Accounts Health Care Flexible Spending Accounts Health Reimbursement Arrangements IRS Section 125 Cafeteria Plans Medical Expenses and Income Tax Plan for Medical that Health Insurance Doesn't Cover Save 25% to 40% on Health Expenses Save on Co-Pays and Over-the-Counter Medications Save on LASIK and Orthodontic Costs Section 125 Plan Administration |
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