an overview of tax-free transportation accounts

How eTRAC® Commute works

IRC Section 132(f) Plans, or Qualified Transportation Fringe Benefit Plans, give employees the opportunity to pay for qualified transportation expenses on a tax-free basis. Account contributions are made before federal income taxes, Social Security taxes, and most state income taxes are calculated.

Eligible expenses may be paid for with an eTRAC MasterCard® card or be reimbursed by submitting a claim form. There are two types of tax-free transportation accounts:

Mass Transit Account

IRC Section 132(f)(5)(c) defines “qualified mass transit” as transportation in a commuter highway vehicle (i.e., bus, train, subway, van pool) if such transportation is in connection with travel between the employee's residence and place of employment.

Parking Account

IRC Section 132(f)(5)(c) defines “qualified parking" as parking provided to an employee on or near the business premises of the employer or on or near a location from which the employee commutes to work by transportation for which a transit pass is used, in a commuter highway vehicle, or by car pool. Such term shall not include any parking on or near property used by the employee for residential purposes.

The Mechanics of Tax-Free Transportation Accounts

Employees wishing to enroll in eTRAC Commute calculate how much money they wish to have withheld from their salary, and notify their employers. The employer sends those funds to Benefit Resource, which uses them to pay qualified eTRAC MasterCard charges or to reimburse employee claims for Section 132(f) benefits.

Spending Limits

The 2009 limits for tax-free transportation spending are currently set at:

$120 per month for workplace mass transit
$230 per month for workplace or commuter parking
Total $350 per month per participant

In some areas, this may not cover a participant's total commuting costs. We allow your employees to add post-tax dollars to their eTRAC accounts so they can easily handle all commuting expenses with their eTRAC cards.

Simple Enrollment

We can easily walk you through our enrollment process. Participants can enroll online in a matter of moments with their Member I. D. They can also go online to change the amount of a monthly contribution, and to see the status of their accounts. Employers transfer payroll data to us once, and then they're done—we handle the rest.

Questions? Contact us.