It’s no secret that mass transit ridership has plummeted across the country since COVID-19 first arrived in the United States.
Even though commuters were not taking mass transit, IRS guidelines prohibited riders from using their commuter benefits funds or from receiving refunds. That’s changing, and it should have a significant impact as many employers are welcoming their employees back to the office.
The IRS has recently issued a general information letter (on qualified transportation fringes under Section 132(f) of the Internal Revenue Code) allowing employees to spend unused transit funds on parking.
Here at Edenred Benefits, we will help millions of employees safely return to work this year while reducing commuter costs as well as the negative impact of pollution and traffic congestion. As the pandemic continues to die down, we’re taking proactive steps to plan, adapt, and shape long-term outcomes in cities nationwide. The rollout of our new Transit and Parking Flex feature is here to accomplish that and we’re excited to offer it to commuters. This feature will allow commuters to use their prepaid card interchangeably for both transit and parking orders. You can also share between transit and parking purses, something that was not possible before.
Here’s how it works
IRS guidelines stipulate that only unused funds from previous months can be shared between transit and parking purses. To avoid any tax liability, Edenred Benefits will ensure that all participating employers are compliant with the IRS.
It’s up to employers to decide whether to enable the feature. If enabled, all employees with our prepaid card will have access. Employees who are currently not using the prepaid card can change their order to start using this feature.
Further, employees can spend up to $270 of unused funds carried over from any prior benefit month. If they carry the funds, they can apply them to either transit or parking expenses using their prepaid card.
Our goal is to offer the most comprehensive access to affordable, efficient, and sustainable commuting choices for the employees. To learn more about our new Transit and Parking Flex Feature, check out our user guide today.