Section 132 Qualified Transportation Accounts
Governed under Section 132 of the Internal Revenue Code, QTAs help you save money by using tax-free dollars to pay for certain transportation and parking expenses. QTAs provide employees with a practical way to decrease their daily transportation costs. Each plan is designed to meet the specific requirements and plan objectives for you, the employee.
How a QTA Works
You select a contribution amount before the plan year starts, and the contribution is set aside to pay for eligible transportation expenses. Those expenses are paid for by using tax-fee dollars, which in turn lower your monthly taxable income and subsequently. You then submit substantiation of your eligible expenses to Benefit Design Specialists for reimbursement.
Benefits
Tax Savings – You have the ability to make contributions to your QTA with a Federal and FICA tax savings. Giving you the ability to leverage a savings on your income for expenses you know you are going to incur.
Flexibility – You have the ability of changing your election amounts on a monthly basis, unlike the Section 125 FSA, you do not need a qualified life status event to make this change.
Plan Types
There are two primary types of QTAs, and you have the ability to participate in one or both plans. The funds in these accounts are kept separate and cannot be rolled from one account to another.
Qualified Parking – This plan allows you to deduct up to $260/month for expenses for parking at or near the employer’s business premises or parking at or near a location from which you commute to work by mass transit, vanpooling, carpool, etc.
Transit Passes and Van pooling – Under this arrangement, you have the ability to set aside up to $260/month to pay expenses for any pass, fare card or similar item that entitles you to transportation on a mass transit system to and from work or for the cost of transportation between your place of residence and place of employment in a commuter vehicle that has a seating capacity of 6 persons or more (not including the driver) where at least 80% of the mileage used for the year is for the purpose of transporting employees to their place of employment.
Seamless Administration
All you need to do is simply submit your receipts to BDS for reimbursement and we will direct deposit the reimbursement directly into your checking account, or we can send you a physical check, whichever method is more convenient for you.
Contact us if you have any questions about your current Transportation Plan or you would like to learn a little more about how this benefit could help you.
