uberPool and Lyft Line Commuter Benefits

Great News! Transit to work, just got easier! You can now use pretax dollars to pay for uberPOOL and Lyft Line when you commute. This means you could save up to 40% when you rideshare to work via uberPOOL or Lyft Line.

Great News! Transit to work, just got easier!
You can now use pretax dollars to pay for uberPOOL and Lyft Line when you commute. This means you could save up to 40% when you rideshare to work via uberPOOL or Lyft Line.

Do you use uberPOOL, or Lyft Lines to commute to work? Now, you can use PRE TAX dollars to pay for your ride share, giving you more alternatives to your daily commute. HRCTS is pleased to announce our VISA ICard has been approved as payment for these vendors, providing you the opportunity to save up to 40% when you rideshare to work!

Lyft Line enables commuters to save money by commuting using their pre-tax dollars. Lyft Line matches people going to the same place at the same time to share an eligible van pool vehicle (six or more seats).  Marketplaces such as:  Miami, Boston,New York, and Seattle can now us their HRCTS VISA iCard to their Lyft Line commute.

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UberPOOL has promoted the four-passenger maximum as a convenient way for people going in the same direction to share a journey and that the pretax commuter benefits will make it more affordable.I'm a new Text block ready for your content.

 

Use of the HRCTS VISA iCard is currently available in the following uberPOOL marketplaces: Atlanta, Boston, Chicago, Denver, Las Vegas, Los Angeles, Miami, New York City, Philadelphia, San Diego, San Francisco, and Seattle, and in the state of New Jersey.

 

 


Transit Limits Increased Retroactively for 2014!

What changed?


On December 19, President Barack Obama signed into law H.R. 5771, the Tax Increase Prevention Act of 2014. This legislation made significant impact upon a number of pre-tax benefits including commuter benefit plans. The legislation, passed by Congress earlier in December, will extend retroactively for one year (through the end of 2014) a number of tax relief provisions that expired either at the end of calendar year 2013 or during 2014, thus preventing tax increases when the tax year 2014 filing season begins early in 2015.  As a result of this new legislation transit and parking pre-tax limits will be set to the $250/month limit.  This is an increase for transit benefits from the current $130/month limit while pre-tax parking benefits remain the same at $250/month.

How does this affect our benefits?

If you currently offer post-tax transit benefit plans you will need to adjust any 2014 post-tax deductions to be pre-tax up to $250/month.  Current IRS guidance indicates that pre-tax transit limits will remain at the $130/month level in 2015.  You do not need to contact HRCTS for any additional adjustments to your benefit plans.  This change will only affect your employees W2 statements.

 


Qualified Transit Locations

Qualified Transit Locations

As a reminder to our clients on January 1, 2012, IRS Revenue Ruling 2006-57 added restrictions to the usage of Transportation Benefit Debit Cards.  Beginning on January 1, 2012 any Transportation Benefit Debit Cards with HR Concepts were restricted for use at merchant terminals which only sell transit fare media. The regulation indicates that the benefit card must be terminal restricted so that the transactions are limited to POS terminals that sell only transit fare media. Please review the qualified transit ID list to determine which transit authorities are in compliance with the IRS ruling.  If a transaction is denied at a terminal or kiosk it is likely due to that terminal not being on the list.  This is typically a temporary issue that the Transit Authority will address but nevertheless can impact transit participants looking to purchase fare media.

 


Transit Accounts: Compliance Update

Acceptable Transit Authorities

On January 1, 2012, IRS Revenue Ruling 2006-57 took effect. This ruling, which has been delayed several times, adds additional restrictions to the usage of Transportation Benefit Debit Cards. Beginning on January 1, 2012 any Transportation Benefit Debit Cards with HR Concepts are restricted for use at merchant terminals which only sell transit fare media. Details of the IRS rulings related to the use of commuter benefit debit cards in association to the IRS Section 132(f) Qualified Transportation Fringe Benefit can be found here.

The regulation indicates that the benefit card must be terminal restricted so that the transactions are limited to POS terminals that sell only transit fare media. Please review the acceptable transit ID list found here to determine which transit authorities are in compliance with
the IRS ruling.

 


Section 132 Parking and Transit Account Update

Commuter Benefit Plan Contributions Increased

GOOD NEWS!

The Emergency Economic Recovery Act signed into law by President Obama on February 17, 2009 provides a significant increase in Commuter Expense allowances for employees from $120.00 to $230.00 per month. Parking Expenses for 2009 remain at $230 a month. These limits are indexed for inflation.

Internal Revenue Code Section 132 and the Transportation Equity Act for the 21st Century (TEA-21) allows employers to offer employees the opportunity to set aside a portion of their salary to pay for certain transportation expenses. The employee will not be taxed on amounts set aside and used for qualified expenses (that is, pre-tax dollars are used to pay the commuting expenses). Under IRS Section 132 and TEA-21 qualified transportation expenses generally include payments for the use of mass transportation (for example, train, subway, bus fares), and for parking (see further details below).

For 2009 the maximum monthly pre-tax contribution for mass transit was $120.00, and $230.00 for parking; however the $120.00 Commuter Expense was increased to $230.00 on February 17, 2009 by President Obama when he signed The Emergency Economic Recovery Act.

 

How Section 132 Works:

The transportation fringe benefit is similar to the pre-tax flexible spending accounts available for medical expenses and dependent care. One important difference, however, is the transportation benefit does not include a "use it or lose it penalty," as is the case with medical/dependent care flexible spending accounts.

Before the start of the Section 132 plan year, individual employees elected to set aside a certain amount of pre-tax salary to cover qualified costs incurred in commuting to work. The employee will designate an amount (up to $230.00 per month) for mass transit expenses and a separate amount (up to $230.00 per month) for parking expenses -- separate reimbursement accounts are maintained for each category, and funds cannot be commingled or transferred between accounts (for example, amounts cannot be transferred from the mass transit to the parking account).

As the employee incurs Section 132 expenses during the year, a request form may be submitted to the plan administrator for reimbursement. If the employee does not use the full amount before the end of the program year, the left over amount is carried forward to the next year.

Who is Eligible Under Section 132:

As a general rule, the transportation fringe benefit can only be provided by employers to employees. Common law employees and officers of corporations are eligible (the law does not include non-discrimination requirements for the benefit). Sole proprietors, partners, independent contractors, and two-percent shareholders of S corporations are not eligible for this transportation fringe benefit.

Qualified Parking Expenses:

Parking expenses that can be paid with pre-tax dollars include the costs of (1) parking a vehicle in a facility that is near the employee's place of work, or (2) parking at a location from where the employee commutes to work (for example, the cost of parking in a lot at the train station so that the employee can continue his/her commute on the train).

 

Qualified Mass Transit Expenses:

Transit passes for mass transportation to and from work. Qualified amounts include costs of any pass, token, fare card, voucher, or other item that entitles the employee to use mass transit for the purpose of traveling to or from his/her place of work. However, when a transit voucher program is readily available, Federal regulations prohibit the use of cash reimbursement as a way to provide transit benefits. Section 132(f) (3) states: Transit Benefits can include cash reimbursement to an employee as long as the reimbursement is for any transit pass, and a voucher or similar instrument which can be used to purchase the transit pass is not readily available for direct distribution to the employee.

The mass transit can be a public system, or a private enterprise provided by a company/individual who is in the business of transporting people in a "commuter highway vehicle." Such a vehicle must have a seating capacity for six or more adults (not including the driver), and at least 80% of the of the vehicles' mileage must be from transporting employees to and from their place of work. Additionally, the vehicle must be carrying at least three passengers (not including the driver). Commuter highway vehicles may be owned or leased by an employer to be used by employees or a third-party provider for transportation purposes. Employees can also own and operate commuter highway vehicles.


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