Can I open a Transportation FSA for UBER or TAXI services?

 

Can I open a Transportation FSA for UBER or TAXI services?  No

Qualified mass transit expenses include:  Transit passes for mass transportation to and from work*. Qualified amounts include costs of any pass, token, fare card, voucher, or other item that entitles the employee to use mass transit for the purpose of traveling to or from his/her place of work. However, when a transit voucher program is readily available, Federal regulations prohibit the use of cash reimbursement as a way to provide transit benefits. Section 132(f) (3) states: Transit Benefits can include cash reimbursement to an employee as long as the reimbursement is for any transit pass, and a voucher or similar instrument which can be used to purchase the transit pass is not readily available for direct distribution to the employee.

The mass transit can be a public system, or a private enterprise provided by a company/individual who is in the business of transporting people in a “commuter highway vehicle.” Such a vehicle must have a seating capacity for six or more adults (not including the driver), and at least 80% of the of the vehicles’ mileage must be from transporting employees to and from their place of work*. Additionally, the vehicle must be carrying at least three passengers (not including the driver). Commuter highway vehicles may be owned or leased by an employer to be used by employees or a third-party provider for transportation purposes. Employees can also own and operate commuter highway vehicles.

 

What are some examples of Mass Transit Expenses?

  • Bus
  • Subway
  • Train
  • Streetcar
  • Ferry
  • Commercial vanpool or commuter highway vehicle 

 

What about claiming bike rental fees when the bike rental is used as transportation to and from my place of employment?  No

Qualified Transportation reimbursements for bicycle expenses was eliminated in 2013. See IRS Letter Number 2013-0032.   “Under section 132(f)(1)(B), a qualified transportation fringe includes any transit pass. Under section 132(f)(5)(A), a “transit pass” is defined as any pass, token, fare card, voucher, or similar item (including an item exchangeable for fare media) that entitles a person to transportation on mass transit facilities(emphasis added) whether or not publicly owned. A bike share program is not a mass transit facility.”

*Only work-related eligible expenses can be reimbursed under the commuter benefits plan. These expenses are defined by Internal Revenue Code Section 132.

 

 

Have more questions? Submit a request