In April 2020, the District of Columbia (D.C.) passed the Transportation Benefits Equity Amendment Act (informally referred to as the “Parking Cashout” law). Watch our mini-webinar below to learn:
- What the Parking Cashout law is.
- Which companies need to comply.
- 4 different methods to achieve compliance, including how to meet reporting requirements.
- How BRI can help support you and your employees.
Continue reading for a high-level overview of top employer questions.
Frequently Asked Questions
What is the “Parking Cashout” law?
Covered employers that are offering parking benefits to employees must do one of the following:
- Provide a Parking Cashout to employees who opt-out of the parking benefit. This cashout value can be applied as a subsidy to a mass transit benefit, to a bicycle commute benefit, to a health benefit (such as FSA, HRA and HSA contributions), and/or as taxable compensation.
- Create a Transportation Demand Management Plan, which reduced the single occupancy vehicle use.
- Pay a Clean Air compliance fee of $100 per employee per month.
A “covered employer” is a company in Washington, D.C. with 20 or more employees who leases or offers parking spots to its employees at a free or subsidized rate. However, there are certain exceptions. For example, if your business meets one of the following criteria, you don’t need to comply yet:
- Employers who own their own parking.
- Hospitals/universities with existing campus plans (through the expiration of their campus plan).
- Employers can delay implementation, if prior to October 1, 2020 entered into a lease and remain under the initial term of the lease, until the end of the lease term.
Who is eligible for a parking cashout?
All employees who are eligible or would have received a free (or reduced) parking benefit AND have opted out of the parking benefit.
What happens when transportation expenses are less than the parking cashout?
The difference can be applied to either an employer contribution to an FSA/HRA or taxable compensation.
How is the cashout value set?
The value of the cashout equals:
- The median of publicly-advertised monthly prices for parking available for rent within ¼ mile of the business (increased to ½ mile if none within ¼ mile), OR
- The rate of $175 per month may be used (adjusted according to price index and value published by the District Department of Transportation (DDOT)) if there is no publicly-advertised parking within 1/2 mile.
What are the reporting requirements?
Reporting requirements vary based on the compliance options selected. The DDOT will provide reporting templates and standards in the coming months.
- Parking Cashout. Employers must report the number of employees offered and accepted benefits every two years. The first report is due January 15, 2023.
- TDM Plan. Employers must provide evidence their plan is being implemented within 90 days of its approval. Every year, you must provide an annual data report to the DDOT. If during that review you are deemed non-compliant, you will have 180 days to comply.
- Compliance Fee. Provide proof of payment to the DDOT every year.
How can BRI help?
BRI can directly support employers in implementing a Parking Cashout benefit by:
- Applying subsidies to a mass transit benefit
- Providing a bicycle commuter benefit
- Applying credits to FSAs, HSAs or HRAs (within current regulatory or plan limits)
- Providing a Specialty Account benefit (as taxable compensation)
Have Additional Questions About the Parking Cashout Law?
Reach out to your assigned representative or fill out our form here to get in touch.