If you are anything like me, the thought of commuting brings about as much joy as the prospect of getting a root canal. There is movement on the commute front which can ease some of the pain involved in getting to your place of employment – at least where the pocketbook is concerned.
If you are not one of the fortunate ones who has a magic bus take you to work every day, there are a few options which will soon be offered by your employer. By September 30, 2014, employers in California with 50 or more employees will have to sponsor a plan to allow their employees to set aside pre-tax dollars to pay for eligible commuting expenses. No, you won’t be able to buy your gas with these pre-tax dollars, but you may be able to use the moola to pay for public transit and parking. If you are not yet putting money aside on a pre-tax basis for anticipated commuting costs, now is the time to start thinking about it.
How do pre-tax commuter benefits work?
You can use the funds to have prepaid transit passes delivered to your home, or use a Commuter Card at most commuting-related point of purchase locations. For individuals using the program for commute parking, you can even have automatic, monthly direct payments made to your parking provider, or choose to be reimbursed with some plan offerings.
When you sign up for commuter benefits you may be able to decide how you will pay for your parking. You can sign up for your commuter benefit provider to send a check directly from your account to your parking garage, or you can pay to park and then get reimbursed via a check or direct deposit.
What commuting expenses are eligible?
Parking and mass transit costs incurred by you in connection with travel between your residence and your workplace are eligible.
Examples of eligible expenses include tickets, passes, tokens, vouchers or other fares for public transit including buses, trains, para-transit vans, or other mass transportation vehicles. Official vanpool fees – for vehicles carrying six or more adult passengers excluding the driver – are also included. Qualified transit expenses are covered up to a monthly limit of $130.
Qualified parking expenses include the cost of parking on or near the business premises of your employer, or near a location from which you commute to work by mass transit, vanpool or carpool. The cost of parking at or near your home is not covered. Qualified parking expenses are covered up to a monthly limit of $250.
You may have both qualified transit and parking expenses up to the monthly limits for each.
What’s not eligible?
And now for the downer. What is not covered? Here is a partial list of some non-covered commute costs:
- Traffic tickets
- Mileage or other costs you incur while operating a vehicle
- Payments to a fellow carpool participant or to a friend who drives you to work
- Parking at your personal residence or spouse’s place of work
- Parking at a mall or similar location where you stop on your drive to or from your place of work
- Expenses that have been or will be paid by your employer
- Parking at an airport for those who fly to work
How do you enroll?
Check with your HR/administrative department. Sequoia can help them find a commuter plan that will work in many locations.