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Overview

Commute plans are offered to allow eligible employees to pay for commute benefits with pre-tax dollars. In some cases, employers may choose to also sponsor a portion of commute benefits for employees. There are three types of commuter benefits: Transit Accounts, Parking Accounts, and a Bicycle Plan.

 

 

Transit Accounts 

Transit accounts are designed to be used for expenses incurred while commuting to work. They include:

 

  • Mass transit passes

  • Tokens

  • Fare cards

  • Transit vouchers

  • Other similar expenses

 

Eligible expenses incurred or paid include the following types of transportation:

  • Mass Transit: Facilities such as train, bus, subway, or ferry, whether or not publicly owned.

  • Transportation for Hire: Transportation services provided by any person in the business of transporting persons for compensation or hire if such transportation is provided in a vehicle with a seating capacity of at least six adults (excluding the driver).

  • Vanpool: Commuter highway vehicle (vanpool) expenses, including vanpools operated by public transit authorities or private sources. These include expenses incurred or paid for transportation in a Commuter Highway Vehicle if such transportation is in connection with travel between your residence and place of employment. A Commuter Highway Vehicle is any highway vehicle with a seating capacity of at least six adults (not including the driver) and for which at least 80% of the mileage for a year is (a) for purposes of transporting employees in connection with travel between their residences and their places of employment, and (b) on trips during which the number of employees transported for such purposes is at least half of the adult seating capacity of the vehicle (not including the driver). 

 

 

Parking Accounts 

Parking accounts are used for expenses incurred or paid for parking at or near your regular place of employment. Alternatively, parking accounts can be used for parking expenses incurred to park your car at a location from which you commute to your regular place of employment by (a) carpool, (b) a Commuter Highway Vehicle, (c) mass transit facilities, or (d) transportation provided by any person in the business of transporting persons for compensation or hire, if such transportation is in a Commuter Highway Vehicle. 

 

 

Bicycle Plan 

Your employer may sponsor a bicycle commuting expense reimbursement policy. This plan covers costs for the purchase of bicycles, bicycle parts, bicycle repairs, and bicycle storage. Bicycle plans can only be employer-sponsored, meaning pre-tax deductions cannot go towards this benefit. The employer-sponsored amount is regulated by the IRS. If you are enrolled in the bicycle plan, you are prohibited from simultaneously participating in the Transit or Parking Plan. 

 

 

Election and Spending Limits 

You may elect any amount of Commute Expense reimbursement that you wish under the plan, subject to the maximum reimbursement amounts specified each year in the IRS code. Below are the pre-tax 2024 Commuter Benefit Limits:

 

  • Transit: $315 per month

  • Parking: $315 per month

  • Bicycle: $20 per month 

 

 

Making Changes to the Commute Election 

You may make changes to your election for commute benefits, opt in as a new participant, or stop your participation at any time in the year. When you make a change, the change will become effective on the payroll cycle after the change is processed by your employer. 

 

 

Termination of Employment

If your employment is terminated, you will cease to be a participant in the Commute Plan. You will not be able to make any more contributions to the plan, and you may not continue to receive benefits under the plan. You may, however, still be able to get reimbursed for eligible parking expenses incurred before your participation ended, but only if you submit claims within 90 days after your termination date. Your debit card will be deactivated upon your termination date.

 

 

Leave of Absence

If you are on a temporary Leave of Absence (but you are otherwise still an eligible employee), you will not be able to use the funds in your commute plan until you have returned to active employment status. 

 

 

Change of Benefits Status

If you cease to be an eligible employee for any other reason (such as a reduction of hours) but you maintain some form of active employment with your employer, you will not be able to make additional contributions to the plan. Also, you will not be credited with additional employer contributions (if applicable). However, you will continue to be able to use your commute account balance to receive benefits under the plan until it is exhausted. At that time, you will then cease to be a participant in the plan. If you become an eligible employee again before your employee status is lost, your ability to elect benefits and make contributions will be restored.

Keywords: commute, transit, parking, bicycle