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 you to use mass transit for the purpose of traveling to or from your 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. IRS Code 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.” The vehicle must have a seating capacity for six or more adults (not including the driver), and at least 80 percent of the vehicle’s mileage must be from transporting employees to and from their places 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

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