Transportation Benefit
The Section 132 Transportation Benefit from PacificSource Administrators allows your employees to set aside pre-tax dollars to pay for work-related parking, transit passes, and van pooling. The elected amount is deducted from their gross income prior to any federal, state, and FICA calculations. As a result, they save on taxes by reducing their taxable salary. Because your total payroll is smaller, you save significantly on FICA taxes.
How the Plan Works
- Each Employee may contribute up to $130 per month for work-related transportation expenses or $250 per month for work-related parking expenses.
- Elected amounts are sent to PacificSource Administrators on a per-payroll basis.
- As employees pay for qualified expenses, they simply submit a reimbursement request with proof of payment to PacificSource Administrators.
- We issue a reimbursement check directly to the employee as soon as funds are available in their account.
- Employees who have funds remaining in their account at the end of one plan year will have those funds rolled into their account for the next plan year.
Getting Started
Plan set-up is quick and simple. Just contact us to get started. We’ll provide enrollment forms and a summary of the plan for easy communication. You give the forms to your employees, they make their elections and return them to human resources, and then payroll sets up two new deduction codes (one for parking and one for transit expenses). You may file claims after the first payroll reduction has occurred.
Ongoing Administration
As the employer, you are responsible for reporting new elections, changes in elections, and termination dates. You will also be in charge of submitting employees’ pre-tax dollars to PacificSource Administrators.
Employer Reporting
Employers can run reports through our Employer Portal to obtain details such as participants’ year-to-date account information, including contributions, claims processed, and claims paid, along with their available balances.
Potential Tax Savings
Participating employees can save approximately 30 cents on every dollar allotted for the plan (federal, state, and FICA). Those in a higher federal tax bracket will save even more.