OMNItran – Transit & Parking Benefit
What is the Pre-Tax Commuter Program?
The Pre-tax Commuter Benefit Program is a qualified transportation benefit program authorized by the Internal Revenue Code (IRC) § 132. These regulations allow employees of the employer to save taxes on parking at work and transit or vanpooling expenses incurred to get to work. Qualified expenses are exempt from Federal, State and FICA (Social Security and Medicare) taxes. Employee tax savings will vary, depending on their deduction amount and tax bracket. Many employees will save approximately $13.50 on every $50 they pay for qualified expenses (27%).
What types of expenses qualify under the Commuter Benefit Program?
Your OMNItran Transit & Commuter plan will include the following:
- Parking at or near employer location or at a location from which the employee commutes to work by carpool, commuter highway vehicle or mass transit. Out-of-pocket parking fees for parking meters, garages and lots also qualify.
- Van-pooling in a commuter highway vehicle with a seating capacity of at least 7 adults, including the driver. At least 80 percent of vehicle mileage must be for transporting employees between their homes and workplace with employees occupying at least one-half of the vehicle’s seats (not including the driver’s seat). Not all employees must work for the employer sponsoring the plan.
- Transit passes, tokens, fare cards, vouchers, or similar items entitling employees to ride a mass transit vehicle to or from work. The mass transit vehicle may be publicly or privately operated and includes bus, rail, or ferry.
How does the plan work?
Employees enroll and authorize the employer to deduct a pre-tax amount for parking or vanpooling/transit from each paycheck, up to the IRS limits stated below. Employees can pay for the qualified transportation & then file a paper claim to recover the amount deducted from their paycheck or use the Take Care card.
The following limits are in effect for the 2019 calendar year:
- Parking deduction is limited to $265 per month.
- Transit passes & vanpooling, whether separately or combined deduction is limited to $265 per month.