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Commuter, transit, and parking FSA
Commuter, Transit, and Parking FSA
The Transportation Equity Act makes it possible for 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 into 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.
- 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 your employer
- Transit or parking expenses for spouses and dependents
- Tunnel, bridge, or highway polls (EZ Pass, etc.)