Transporation Reimbursement Account

Understanding the Parking and Transportation Program (Section 132)

The Parking and Transportation Program is a plan administered by Benefit Advantage that saves you money. The program allows employees to pay for qualified parking, transit, and vanpooling with pretax dollars deducted from their paychecks. Saving money doing everyday activities such as traveling is just that easy.

Benefits of Implementing A Transportation Program

  • Allows an employee to pay for employment related parking and mass transit services on a pre-tax basis.
  • Employees save federal, state, and social security taxes on all money utilized through this program.
  • Employer saves payroll taxes on every dollar contributed to this program by its employees.
  • Employees can utilize more than one portion of the program, i.e., they can both pay for parking at the train or subway station, and pay for the subway, all via the Section 132 plan.
  • Unused funds may be rolled over from one period to another, therefore loss of funds is minimized.
  • Employers are not required to file a 5500 form

Transit Passes

Any pass, token, fare card, voucher, or similar item that entitles the employee to transportation (or transportation at a reduced price), provided that such transportation is mass transit facilities, or provided by an entity in the business of transporting persons if such transportation is provided in the type of highway vehicle eligible for use in vanpooling.

Effective January 2016, the reimbursement maximum amount is $255 per month.

Qualified Parking

Parking provided to an employee on or near the business premises of the employer. It can also mean parking provided on or near a location from which the employee commutes to work by mass transit or by vanpooling, in a commuter highway vehicle, or by car pool. It does not include parking in or near an employee's residence.

Effective January 2016, the reimbursement maximum amount is $255 per month.

Vanpooling (Commuter Highway Vehicle)

Transportation to and from work and an employee's residence, but only if in a "commuter highway vehicle." The latter term is limited to a highway vehicle with a seating capacity of six or more adults (not including the driver), and at least 80% of the mileage is of which can reasonably be expected to be for purposes of transportation of employees between work and residences, and on trips during which the number of employees carried is at least one half of the adult seating capacity of such vehicle (not including the driver). They may include transportation furnished by the employer. These provisions appear calculated to prevent the benefit from being available for typical limousine service limited to only a small number of employees.

Effective January 2016, the reimbursement maximum amount is $255 per month.