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.
As an employer, you 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 you maximize your employee retention by offering your employees this tax savings program. Your employees can save 30 to 40% on their tax burden by utilizing the CRA which results and a win-win situation for both the employer and the employee.
How does it work?
Employees who want to participate in the Commuter Expense Reimbursement Account can make monthly elections for both parking and mass transit and those elections may be changed each month. This amount is reduced from the employee’s income prior to taxes. When commuter expenses are incurred, employees will submit a completed claim form along with appropriate supporting documentation for reimbursement. Employees cannot be reimbursed more than the balance in their account. The employer also has the option of offering the Pre-Paid Benefits Card for these expenses.
When employees use our Pre-Paid Benefits Card to pay for qualified transportation costs at a merchant accepting MasterCard location, funds are automatically deducted from the pre-tax dollars in their Commuter Reimbursement Account. Employees can view their account online at www.thepreferredgroup.com to keep apprised of charges, contributions, and current balances for the remaining plan year.