Commuter, transit, and parking FSA

The Transportation Equity Act allows employees to use pre-tax dollars to pay for qualified work-related commuting and parking expenses. This represents a significant tax savings of up to 40 percent! (depending on tax rate)

Once you have contributed money to your Parking and/or Transit Account, you can use it to pay for parking and mass transit-eligible expenses related to commuting to work tax-free.

You should keep all of your receipts and pertinent documentation in order to prove your Parking and/or Transit Account was used for eligible parking and/or mass transit expenses.

An eligible expense is a work-related transportation fee for parking or mass transit the IRS states can be paid for without taxes.

Eligible Expenses for Transit and Parking Accounts (all expenses must be work-related):

Transit Expenses (public transportation)

  • Bus passes
  • Subway vouchers, passes or tokens
  • Train vouchers, passes or tokens
  • Vanpooling fees

Note: Eligible transit expenses must be work related.

Parking Expenses

  • Metered parking
  • Monthly and/or daily parking fees for parking lots and/or ramps
  • Park n’ ride lots
  • Parking at mass transit facility

Note: Eligible parking expenses must take place at or near your place of employment, or at a location from where you commute to work.

Note: If you pay for anything other than eligible expenses with your parking and/or transit account(s), the amount will be taxable, and you will be required to repay the amount or pay an additional 20 percent tax penalty.

Below is a partial list of ineligible expenses. For the complete list of eligible and ineligible expenses, visit www.IRS.gov and see IRS Publications 5137.

Note: If you park at your place of employment, your deductions may already be taken pre-tax. These deductions are not eligible.

  • Airline flights
  • Bicycle-related expenses
  • Expenses incurred in traveling from an office to business or client meetings
  • Non-work-related transportation or parking expenses
  • Parking for business meetings
  • Residential parking fees
  • Tolls, gas, or other driving-related costs
  • Transit costs reimbursed by your employer
  • Transit or parking expenses for spouses and dependents
  • Tunnel, bridge, or highway polls (EZ Pass, etc.)

Detailed Info