AN OVERVIEW OF COMMUTER BENEFIT PLAN (CBP) ACCOUNTS
How a Benefit Resource CBP Works
IRC Section 132(f) Plans, or Commuter Benefit Plans (CBP), give employees the opportunity to pay for eligible workplace commuting expenses on a tax-free basis. Account contributions are made before federal income taxes, Social Security taxes, and most state income taxes are calculated.
A CBP participant can use an eTRAC Prepaid MasterCard or a Beniversal Prepaid MasterCard to pay for eligible expenses. When a card can't be used, the participant can pay out-of-pocket and then request reimbursement by submitting a claim to Benefit Resource. There are two types of tax-free CBP 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 a 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 CBP Accounts
Employees wishing to enroll in a CBP 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 eligible card purchases or to reimburse employee claims for Section 132(f) benefits.
Spending Limits
Effective January 1, 2012, the limits for tax-free workplace commute spending will be set as follows:
• for mass transit:
- $125/month
• for workplace or commuter parking:
- $240/month
In some areas, this may not cover a participant's total commuting costs. We allow your employees to add post-tax dollars to their CBP accounts so they can easily handle all commuting expenses with their cards.
Simple Enrollment
We can easily walk you through our enrollment process. Participants can enroll online in a matter of moments with their Member ID and Company Code. 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!