Commuter benefits help you to pay for the public transportation, vanpool, or parking that you need to get to and from work with pre-tax money – money you deduct from your paycheck before you pay taxes.
Vanpool applies to transit with more than five passengers and parking benefits must be used for parking at or near work, or at or near a place where you take public transportation to work (such as at a Park and Ride).
You can contribute up to $125 a month for public transit or vanpool, and up to $240 a month for parking, making a total of $365 per month ($4,380 for the year).
Yes, the 2012 contribution limit for public transportation changed from $230 to $125 per month. Congress temporarily increased the limit in 2009, but without action to extend the legislation it returned to its original level of $120 per month, plus a $5 adjustment for inflation. Pre-tax contributions for parking changed to $240 per month to account for inflation as well.
Yes, if you can change your contribution amount monthly if you need to, depending on if you’ll be traveling or if you’ll use other ways to get to work.
No. Taxis and airport parking are also ineligible.
In most cases, you can sign up any time—the benefit will be effective for the first month possible after you make your election.
“In the past two years I have had to have significant dental work done to correct bone and tooth loss that was occurring in my upper jaw. Since my dental plan was good, but not unlimited, I loaded up my FSA with the maximum amount, and I am really glad I did because I had more than $3,000 in dental fees beyond what my plan covered. ”
Annual Savings: $2000