Commuter Benefits for Your Company
Tax-Free Dollars Toward Commuting Costs
What are Commuter Benefits?
Commuter benefits allow employees to pay for certain workplace commuting expenses, including mass transit and parking, on a tax-free basis through payroll deductions. Monthly elections for mass transit and parking are made separately and automatically roll from month to month. Benefits to employees are tax-free dollars which are put into an account for your employees for qualified parking and qualified transportation. Eligible parking expenses include paying for parking at your place of work or paying for parking at the location from which you are taking mass transportation to work (bus stop, train station, etc.). Eligible mass transit expenses include bus, rail, subway passes, or vanpool (6 or more people). In short, any form of mass transit that you are using to commute to work.
Ride Sharing and Commuting
UberPOOL and Lyft Line rides also qualify as eligible transit expenses, though they must adhere to the IRS regulations for Qualified Transportation plans. IRS Publication 15-B states that a qualified commuter vehicle “is any highway vehicle that seats at least 6 adults (not including the driver)”. If you pay forUberPOOL or Lyft Line using your personal debit or credit card and plan to file a claim to be reimbursed for the ride from your Qualified Transportation account, your assigned vehicle must have had at least 6 seats (not including the driver) for the ride to be considered an eligible expense. Individual Uber or Lyft rides (non-UberPOOL, non-Lyft Line) are not eligible transit expenses.
How Do Commuter Benefits Work?
Employees can enroll in one or both commuter accounts during the enrollment window(s) set by the employer. They choose how much you want to contribute to their account(s), up to the maximum set by the IRS. The maximum contribution amounts in 2018 are as follows:
- Qualified Parking: $260 per month
- Qualified Transportation: $260 per month
These maximum election amounts can vary by employer; check with your HR team to confirm what the allowed maximum is for your plan.
When enrolled, a Unicorn HRO Debit Card is sent by mail, which users can then provide as payment for eligible expenses. If an expense is paid for out-of-pocket, a claim can be filed to be reimbursed from the account. Users will be given access to an online consumer portal where they will be able to manage the account.
The amount elected to be deducted from each paycheck is pre-taxed and put into the individuals account, which it can then be used to pay for eligible expenses. The max each user can spend is only up to what the balance in the account is at any given time. Any money not used will roll over from month to month, so it can be saved, risk-free!
Unlike other flexible spending accounts (FSAs), employees will not need to experience a qualifying life event to change their parking or transit election amount. IRS regulations permits users to increase or decrease their monthly election amount at any time if they find that the amount they are contributing exceeds spending.
Let Us Help You Manage Your Commuter Benefits
Offering commuter benefits to your staff is simple with Unicorn HRO. Our iCON platform offers automation and simplicity for you and your organization to access necessary information related to HR and benefits administration.
Learn how Unicorn HRO solutions help your organization today.