Can work-related commutes be reimbursed?
Back-to-back traffic. Delays on the bus or train. Every morning you leave your house hoping you won’t run into the traffic gridlock, and you are not alone. For 600,000 people in America, 90 minutes of travel time over the span of 50 miles are a daily commute reality.
There are ways to make the commute a little less stressful…
If your employer offers a Transportation Reimbursement Account (TRA), also known as a Commuter Reimbursement Account, you will be able to save on commuting expenses on a pre-tax basis. Commuter benefits are meant to reduce traffic congestion by urging you to use public transportation. You can sign up for this benefit at any time.
Mass Transit – Transit passes for rail, bus or ferry are eligible. Transit passes include passes, tokens, fare cards, or vouchers that let people ride (on mass transit or in at least a six-person vehicle) at either a lower rate or freely.
Vanpooling (commuter highway vehicle) expenses are covered if minimum requirements are met. Mileage must at least be 80% for transportation to and from work. At least six employees and the driver must be in the van and half the seats occupied.
Qualified parking consists of parking near the workplace or close to a location from which employees commute to work either via transit, vanpool or carpooling. Residential parking does not qualify.
Bicycle commuting – A tax-free bicycle benefit was added in 2009. Reimbursement for that is up to $20/month ($240/year) on qualifying expenses including bicycle purchases, repairs, improvements, and storage. The bike must be regularly used for commuting.
You can spend up to $245/month combined on both transit and vanpool expenses. You can also spend up to $245/month on qualified parking.
Not eligible for Commuter Benefits
- Fuel, tolls, mileage.
- Any non-work related travel (taxis)
- If you are self employed, you would not be able to get the commuter benefits.
- Partners, independent contractors, and two-percent shareholders of S corporations are not eligible for the transportation fringe benefit.
- Spouses and dependents (kids).
Unused funds roll over at the end of each month, but you can only spend the monthly IRS contribution limit. You have the ability to change future contributions to avoid excess funds.
More IRS information on 2013 fringe benefits for employers can be found here.