Internal Revenue Code Section 132 and the Transportation Equity Act for the 21st Century (TEA-21) allow employers to offer employees the opportunity to set aside a portion of their salary in a Transit and Parking FSA to pay for certain transportation expenses. The employee will not be taxed on amounts set aside and used for qualified expenses (that is, pre-tax dollars are used to pay the commuting expenses).
Each year’s Section 132 Plan benefit amount is found in the corresponding year’s IRS Publication 15-B, Employer’s Tax Guide to Fringe Benefits.
For 2017 the maximum monthly pre-tax contribution allowance for mass transit and van-pool is $255.00 per month with an additional monthly allowance of $255.00 for parking.
For 2018 the maximum monthly pre-tax contribution allowance increases by $5 per month. For mass transit and van-pool the monthly allowance is $260.00 per month; with an additional monthly allowance of $260.00 for parking. For complete details on the 2018 IRS Inflation Adjustments, please view: https://www.irs.gov/pub/irs-drop/rp-17-58.pdf
If you are missing out on this benefit, consider the savings available to you and your employees when pre-tax dollars are used to pay for these qualified commuter expenses:
– Walking;
– Carpooling; and,
– Rollerblading or Roller-boarding to work.
Core Documents provides employers with everything they need to establish a compliant Section 132 Commuter Plan.
For only $99, your Plan Document Package arrives ASAP via email in .pdf format. For $149, you receive the .pdf as soon as your personalized Plan Document is ready plus a printed copy in our deluxe 3-ring binder version (sent via Priority Mail).
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