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 Plan and Dependent Care Legislation Updates

Congress approved a one year extension through 12/31/2011 of the pre-tax mass transit benefit cap of $230 per month. Without the extension, the monthly maximum contribution would be reduced to the prior limit of $120.

The legislation also extends prior expiring changes to the dependent care tax credit, which has the following impact on dependent care benefits:

  • Extends the increased tax credit amount for dependent child care expenses under Section 21 (remains $3000/6000 in lieu of $2400/4800)
  • Extends the higher assumed earnings amount for an incapacitated or full-time student spouse (remains $250/500 in lieu of $200/400).

In Notice 2010-94, the IRS delayed the effective date for the transit plan debit card ruling (Revenue Ruling 2006-57) until January 1, 2012: http://www.irs.gov/pub/irs-drop/n-10-94.pdf. The delay is to provide transit systems more time to adapt their technology for compatibility with the requirements for vouchers


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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