Transit & Parking
As employees return to collaborate with their colleagues on-site or through hybrid work scenarios, offering a transit plan benefit can help.
A Transportation Reimbursement Account (TRA) allows your employees to cover commuting costs with pre-tax income. See how isolved can help determine the needs of your TRA based on the cities in which your employees work and commute.
What are Qualified Transportation Accounts (QTAs)?
QTAs allow employees to set aside pre-tax funds used for eligible transit and parking expenses related to commute to work, governed by IRC Section132. In other words, the money deposited into a QTA will never be taxed. That saves employees money on every dollar they set aside. Employees can save as much as 40% on transportation expenses just by participating in a QTA.
Eligible expenses and contribution limits
Qualified expenses include costs such as:
- Qualified parking - parking utilized near your place of employment or allowing you to commute to work.
- Transit pass - pass, token, fare card or voucher purchased to get you to and from work.
- Vanpooling - transportation provided between your home and work in a commuter highway vehicle. The vehicle must hold more than six adult passengers, and 80 percent of the vehicle mileage must be used to get people to and from work.
Annual contribution limits are set by the IRS and they do change from time to time. isolved stays on top of these changes and you can see all the contribution limits here.
City-specific Transit Benefit Requirements
San Francisco Bay Area
Employers with 50+ full-time employee within the jurisdiction of the Air District must offer one (or more) of the following commuter benefit options:
- Pre-tax benefit option
- Employer-provided subsidy
- Employer-provided transit alternation commuter benefit
New York City
All non-government employers with 20 or more full-time, non-union employees working in the area required to offer full-time employees the opportunity to use pre-tax income to pay for their transportation by public or privately owned mass transit or in a commuter highway vehicle.
Washington, DC
Employers with 20+ full-time employee working in the District of Columbia must offer one (or more) of the following commuter benefit options:
- Employee-paid pre-tax contribution
- Employer-paid direct benefit
- Employer-provided shuttle or vanpool
New Jersey
Employers with at least 20 full-time employees who are not in a collective bargaining agreement must offer one (or more) of the following commuter benefit options:
- Employee-paid pre-tax contribution
- Employer-paid direct benefit
- Employer-provided subsidy
How isolved makes your employees’ commute less painful
Transit plans are easy to set up and use, and participants will receive debit cards that allow them to pay for the expenses with the funds they set aside, instead of having to wait for reimbursement. Transit pass purchases will auto-adjudicate 100% of the time which eliminates the requirement to provide documentation. For administrators, isolved offers:
- Account and activity may be monitored by iFlex smartphone app
- Website access to monitor accounts
- Monthly reports to employer
If you’d like to learn more about isolved transit plan solution, click here