Qualified Transportation Plans

A qualified transportation plan (Section 132) allows employers to offer transportation fringe benefits to employees on a tax free basis. This will allow employees to be reimbursed for qualified parking, transit passes, and transportation in a commuter highway vehicle as long as the travel is between the employee’s residence and place of employment.

Who can participate in a Qualified Transportation Plan?

Employees who are considered common-law and statutory employees are able to participate. Therefore, those individuals that are former employees or self-employed would not qualify for the tax exclusion benefit. Employers, however, offering the qualified plan can limit employees participation since there are no nondiscrimination rules.