Is the pre-tax benefit the same as a flexible spending plan?
It will appear that way to employees but this benefit is different on the payroll side. Pre-tax transit is under IRS code, Section 132(f), Qualified Transportation Fringe. It is not part of Section 125. Pre-tax transit is open to everyone. There are no eligibility requirements, enrollment timeframes nor reporting required. It may be offered to union and non-union employees. The more employees that participate in the pre-tax transit benefit, the more the employer saves on payroll costs. Pre-tax transit is not a ?use it or lose it? benefit. It is intended to be deducted and used each month. However, since employers capture the payroll deductions upfront, the employee uses the deductions on a rolling basis. The deductions do not evaporate if not used, they store. Vouchers do have expiration dates, usually 13 months from when the employer purchases them.
