A Commuter Reimbursement Account, allowed by § 132 of the Internal Revenue Code, allows employees to have their parking and commuter mass transit expenses deducted on a pre-tax basis. Employees can deduct up to $230.00 per month for parking costs and an additional $230.00 for utilizing mass transit.
The employer will save 7.65% matching FICA for each dollar that is placed in a Commuter Reimbursement Account. This savings will offset the administrative costs of the program and will help maximize employee retention by offering employees this tax savings program. Employees can save 30-40% on their tax burden by utilizing the CRA which results and a win-win situation for both the employer and the employee.