Qualified Transportation Expenses

[PJ2009]

Does the cost of a bus pass to get to work qualify under the qualified transportation expense program? I would think so, but want a second opinion.

[Guest Sieve]

Yes. A transit pass qualifies. It cannot, however, be part of a cafeteria plan (although you can elect to have your salary deferred so that the employer can purchase a transit pass for you or reimburse you for your own purchase of one).

[Chaz]

Yes. A transit pass qualifies. It cannot, however, be part of a cafeteria plan (although you can elect to have your salary deferred so that the employer can purchase a transit pass for you or reimburse you for your own purchase of one).

Note that employers generally cannot provide direct cash reimbursements to employees for transit passes unless the "Readily Available" test is passed (or failed, depending on your perspective). If transit vouchers are readily available, many employers don't offer transit passes because of the administrative headaches involved.

[MARYMM]

Yes. A transit pass qualifies. It cannot, however, be part of a cafeteria plan (although you can elect to have your salary deferred so that the employer can purchase a transit pass for you or reimburse you for your own purchase of one).

Note that employers generally cannot provide direct cash reimbursements to employees for transit passes unless the "Readily Available" test is passed (or failed, depending on your perspective). If transit vouchers are readily available, many employers don't offer transit passes because of the administrative headaches involved.

Its been a few years since I adminsitered a Sec 132 Plan, but IIRC there was also a "cost test" the employer could pass/fail. If there were fees involved in obtaining vouchers or passes, the employer could do reimbursements to employees.

[PJ2009]

Thanks, everybody...very helpful. I did some digging and found that the transit pass benefit , which has been limited to $120/month, was recently increased under the Simulus Bill to $230/month, matching the $230/month limit applicable to the monthly parking benefit. As it turns out, the plan decided to stick with the parking benefit. As one of the posters mentioned, administrative headaches!