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What are Parking and Transit Deductions?
Through parking and transit accounts, qualified employees can use tax-free funds to cover some parking and transportation costs associated with their jobs.
There are criteria for eligibility for parking and transit deductions.
- Eligibility: Every employee is qualified for this program, including student hourly employees and rehired annuitants, with the following exceptions:
- Student assistant: Trainees, Scholars, and Fellows
- Employee-in-training: Post-Doctoral Fellow/Trainee, Graduate Intern/Trainee
Parking and Transit Deductions
Parking accounts pay for parking-related costs like parking ramps. Your expenses are already pre-taxed deductions if you pay for University parking through a payroll deduction, so they are not covered by a Parking Account.
The amount of the monthly contributions is $280 (in 2023)
The Transit Account pays for work-related transportation costs, such as passes for public transportation to and from the office (such as buses, trains, and subways) and commuter highway cars (such as vanpools).
The amount of the monthly contributions is $280 (in 2023)
Nontaxable Employee Transit and Parking Expenses
Employers are permitted to offer tax-free QTR benefits under Section 132(f) for each of the following up to a monthly cap ($280 for 2022): transportation between the employee’s home and place of job in a commuter vehicle or any valid transit pass.
The qualifying parking monthly exclusion for 2022 is $280. If an employee’s parking expenses exceed this sum, the excess is considered part of their compensation and is liable to FICA, FUTA, and the federal income tax withholding (FITW) tax.
Also, See: Moving Expense Reimbursement
