What is a Transportation
Flexible Spending Account?
Established under Section 132
of the IRS Code, a Transportation Flexible Spending Account
is an employee benefit plan that allows you to set aside
a portion of your gross salary to pay for work-related
parking and mass transit expenses on a pre-tax basis.
These accounts are for specified transportation and
parking expenses for commuters.
A Transportation Flexible
Spending Account works much the same as a Health
Flexible Spending Account. Employee’s elect the amount
to contribute into their Transportation FSA through
pre-tax payroll deductions. Then, employees can access
the funds to pay for qualified transportation expenses
using a manual claim reimbursement process or the
PowerFlex Benefits Debit Card.
There are two types of Transportation Flexible Spending
Plans under Section 132:
These accounts must be maintained as separate
accounts and funds cannot be combined or transferred
Eligible Expenses for a Transit and Vanpooling
Mass Transportation (e.g. subway or bus) passes,
tokens, fare cards, vouchers (or similar items.
Transportation via a commuter highway vehicle
(Van-pool) to and from the participants residence
and the place of employment. (Important Note:
The commuter highway vehicle must seat at least six
passengers plus the driver)
Eligible Expenses for a Parking Account:
Expenses for parking at or near place of
Expenses for parking at or near a point of mass
transit, commuter highway vehicle, or carpool.
Tunnel, bridge, or highway tolls (EZ Pass)
Non-work related transportation or parking
Fuel, mileage or other costs incurred to operate
a personal vehicle or taxi
Expenses incurred in traveling from your office
to business or client meetings
Transit or parking expenses of your spouse and
The maximum amount you may contribute for 2011 is:
Transit and Vanpooling - $230.00 per month
Parking - $230.00 per month
Election Changes and Unused Funds
Unlike a Medical Flexible Spending Accounts, your
Parking and Transit contribution amounts can be modified
from month to month as your needs change. You can only spend the amount
of the monthly IRS limits ($230 for transit and $230 for
parking) in any given month; however, your unused
contributions carry forward indefinitely. You can use
these carry over funds for future eligible
transportation and parking expenses as long as you
remain with your current employer. Upon termination, any
remaining balances in your account may only be used to
reimburse expenses incurred prior to your termination.