U.S.
Quality of Work Life Division
USDA Transit Subsidy Benefit Program
– Guidance Letter
United States
Department of
Agriculture
Office of the
Assistant Secretary
for Administration
Office of
Human Resources
Management
Avenue
Washington
TO: Deputy Administrators for Management
FROM:
Donna D. Beecher/signed by Joseph Colantuoni
Director
SUBJECT: Pre-Tax Parking
The Office of General Counsel has provided guidance that clarifies the authority and eligibility for employees to exclude certain parking expenses from their taxable income (pre-tax parking). This benefit is provided for by Executive Order 13150, Code of Federal Regulations 1.132.9, and 5 United States Code 7905.
Based on the above, any mission area/agency/staff office may authorize pre-tax parking for their eligible employees. Where there is bargaining unit representation, mission areas/agencies/staff offices must fulfill any labor/management obligations.
For simplicity, we are providing this guidance in the
attached questions and answer format. If you have any questions please
contact James A. Stevens at (202) 720-8248 or e-mail: jamesa.stevens@usda.gov
Attachment
PRE-TAX PARKING FREQUENTLY ASKED
QUESTIONS AND ANSWERS
Q: Which employees are eligible for pre-tax parking?
A: Employees who park at eligible parking locations and who also meet any of the additional qualifying criteria as presented here.
Q: What are eligible parking locations?
A: A metro-parking lot, commercial lot, privately owned parking lot, parking garage, parking meter, or employer provided parking.
Q: What are the additional qualifying criteria?
A: An employee must either take mass transportation, or ride in a vanpool, or in a carpool of two or more persons from the parking location to work.
Q: Can an employee driving a vanpool or carpool and parking in an eligible location be authorized pre-tax parking?
A: Yes. Example: The primary driver of a vanpool or carpool that parks in a commercial lot (or other eligible parking location), and whose members then walk to work is eligible for pre-tax parking.
Q: Can a single occupant of a vehicle who drives to work, parks at an eligible parking location, and does NOT take mass transportation, and does NOT ride in a vanpool or carpool from that location be authorized pre-tax parking?
A: No. The intent of the program is to encourage employees to use mass transportation, a vanpool, or carpool and to discourage the use of single occupancy vehicles to travel to work.
Q: How do employees apply for pre-tax parking?
A: Eligible employees should submit an application to their
designated transit subsidy coordinator. The transit subsidy coordinator
will submit the approved application to the servicing personnel office for
inputting into the
Q: Is a written policy required to implement pre-tax parking?
A: No.
Q: Is proof of the cost of parking required?
A: Yes. It may be in the form of a parking lot receipt or, if no receipt is provided, the application itself will suffice.
Q: Is the
A: Yes. NFC instructions were previously provided to
operating personnel offices
on
Q: What document is used to report the amount of an employee’s pre-tax parking to the Internal Revenue Service?
A: The W-2 Form.
Q: How is the pre-tax parking benefit computed in the personnel/payroll system?
A: The answer is based on an example of a GS-15, Step 5 in the 30% Tax Bracket and claiming $180.00 a month for pre-tax parking.
You would take $180 x 12 (months) divided by 26 pay periods. This would equate to $83.07. The GS-15, Step 5 gross salary is $3,881.60 (depending on locality). Subtract the $83.07 from the $3,881.60 ($3,798.53). Taxes are then calculated on the $3,798.53, if this was the only allowance the employee had.