Save money on commuter expenses.
Commuter benefits overview
Reduce your commuting expenses by taking advantage of commuter benefits. The IRS allows for certain work-related transit and parking expenses to be deducted from your paycheck on a pre-tax basis. Because you do not pay taxes on these expenses, you can save on commuter expenses.
For tax years beginning after January 1, 2021 the IRS allows up to $270 a month to be deducted pre-tax for commuter costs, and up to $270 a month pre-tax for parking costs. Any amount beyond that becomes a post-tax deduction.
Online ordering model
Use your commuter benefits to purchase qualified products and services.
You decide how and where to spend your commuting dollars.
In 2021, the IRS allows you to set aside $270 pre-tax each month for transit expenses and $270 for parking expenses.
In 2022, the IRS allows you to set aside $280 pre-tax each month for transit expenses and $280 for parking expenses.
For ongoing commuter-related expenses, you can set up a recurring order that will automatically generate your transit order or pay your contracted parking vendor. If your commuting needs change, you can adjust or discontinue your order.OR
- Public transit fares for buses, ferries and commuter rail
- Vanpool fares
- Parking expenses
- Bicycle commuting expenses, if offered
- Simply go to optumfinancial.com and sign in as an account holder.
- Select the transit or parking services you want.
- Place your order.
- Set up an automatic order to make the same purchase every month.
- Receive your order at home by mail.
Employer election model
Elect a commuter benefit to pay for qualified products and services.
Want to save money on your commuting costs to and from work? It’s easier than you may think — here’s how you can do it:
- Enroll in commuter benefits through your employer.
- Choose how much you want to contribute — up to $270 maximum/month in 2021 and up to $280 maximum/month in 2022.
- Your employer deducts your chosen contribution amount from your paycheck before taxes. So, you don’t pay federal, state or payroll taxes on your contributions (although some states do tax these contributions).
- Use your Optum payment card to access your funds for qualified transportation costs.
- Save money as you lower your income taxes.
- Monthly, pre-tax contribution limits are set by the IRS and reviewed and adjusted occasionally with other cost of living adjustments.
The Optum payment card maintains separate accounts or “purses” of pre- (and post-) tax money for parking and transit and directs the card transaction to the appropriate purse based on the Merchant Category Code (MCC) at the point of sale.
And if the participant already has an Optum payment card for other accounts, such as FSA or HSA, the commuter benefits account(s) can be stacked on the same card. The payment card cannot be used at alternative outlets, such as restaurants and grocery stores.
The amount of available funds on the payment card must cover the entire mass transit or parking expense or the transaction will be declined. The participant may split the cost by swiping their card for the exact available amount and then pay for the remaining amount with an alternate form of payment.OR
When the participant uses the payment card for parking expenses, there’s no paying cash up front, no claim forms to fill out and no waiting for reimbursements. The payment card helps with Qualified Transportation Account (QTA) expenses such as parking expenses for any type of vehicle at or near the participant’s work location or at or near a location from which the participant commutes using mass transit.OR
The payment card can be used for mass transit passes, tokens, or fare cards purchased at a valid transit fare terminal.OR
Health savings accounts (HSAs) are offered or administered by Optum Bank®, Member FDIC, or ConnectYourCare, LLC, each a subsidiary of Optum Financial. HSAs are subject to eligibility requirements and restrictions on deposits and withdrawals to avoid IRS penalties. State taxes may apply. Fees may reduce earnings on account. Flexible spending accounts/arrangements (FSAs), health reimbursement arrangements (HRAs), Commuter and Parking Benefits, Adoption Reimbursement Plans, Tuitions Reimbursement Plans, Surrogacy Reimbursement Plans, Lifestyle Plans, COBRA Benefits, and all other account types are administered on behalf of your plan sponsor by Optum Financial, Inc. or ConnectYourCare, LLC (collectively, “Optum Financial”) and are subject to eligibility and restrictions. Please contact a legal or tax professional for advice on eligibility, tax treatment, and restrictions. Please contact your plan administrator with questions about enrollment or plan restrictions. Federal and state laws and regulations and the design of your plan are subject to change.
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