Pre-tax Commuting Expense Plan
Internal Revenue Code (Section 132) allows employees to pay for certain commuting expenses on a pre-tax basis (commuting expenses are treated as a "business expense" when an employee elects such in lieu of compensation -- a salary reduction).
It is important to note that this benefit is not a part of the Tax Saver Benefit (TSB) Plan.
Pre-Tax Parking Expenses
The Plan allows an employee to exclude from gross income up to $265** (2019) per month for "qualified parking" (defined as parking provided to an employee on or near the business premises of the employer). Indiana University will provide the benefit directly for the purchase of IU parking stickers on a salary reduction basis through the payroll system. This qualified parking allowance is voluntary -- any employee who does not wish to take advantage of this benefit may pay parking fees directly to campus Parking Operations.
Pre-tax Mass Transit and Commuter Highway Vehicle* Expenses
The Plan allows for qualified mass transit expense up to $265** per month combined for bus, train, or commuter highway vehicle, expenses that take the employee to and from work. Upon submission of qualified receipts for mass transit expenses, a pre-tax credit through the University's payroll system will be prepared. Employees save on payroll and income taxes on the amount of the benefit they purchase, since that amount is no longer treated or reported as taxable salary.
Effective June 30, 2019 Indiana University will discontinue the Mass Transit Commuter Benefit portion of the Pre-Tax Commuting Expense Plan. This portion of the benefit allows for the reimbursement of qualified mass transit expenses that take the employee to and from work.
You may continue to incur transit expenses through the first and second quarters of 2019 (Jan 1, 2019 through June 30, 2019). However, in order to receive the pre-tax credit through payroll, claim forms and receipts must be received by the IU Human Resources office no later than September 30, 2019.
*A commuter highway vehicle is any highway vehicle that seats at least 6 adults (not including the driver) and is reasonably expected that at least 80% of the vehicle mileage will be for transporting employees between their homes and work place with employees occupying at least one-half the vehicle's seats (not including the driver's).
**This figure is subject to IRS regulation and may change each year.
All Indiana University employees with a regular salary payment may elect to participate in the Plan, excluding those with student status.
Indiana University covers the administrative costs of the Pre-Tax Commuting Expense Plan.
Enrollment in the Pre-Tax Parking Expense provision is handled through campus Parking Operations. Those wishing to participate will be required to sign and return a Salary Reduction Agreement for parking sticker payments through the payroll system.
The claim form can be accessed below. Submission instructions are on the form.