Commuter & Transit Accounts

Commuter & Transit Accounts

Though mass transit has always been eco-friendly and a great way to get to work, employees have to cover costs from bus passes and tokens. With a Transit and Parking Account — also called a Commuter Account — participants can use a tax-favored vehicle to cover the costs associated with their commute.

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What Is a Commuter Transit Account?

A commuter account is an employer-sponsored benefit program that allows an employee to set aside pre-tax funds in separate accounts to pay for qualified mass transit and parking expenses associated with your commute to work.

Qualified expenses include:

  • Mass Transit: Get reimbursed for transit passes, tokens, fare cards, vouchers, or similar items entitling you to ride a mass transit vehicle to or from work. The mass transit vehicle may be publicly or privately operated and includes bus, rail, or ferry.
  • Van-Pooling: Van-pooling is not to be confused with carpooling. Van-pooling requires a commuter highway vehicle with a seating capacity of at least 7 adults, including the driver. At least 80 percent of the vehicle mileage must be for transporting employees between their homes and workplace, with employees occupying at least one-half of the vehicle’s seats (not including the driver’s seat).
  • Parking: Get reimbursed for parking expenses incurred at or near your work location or a location from which you continue your commute to work by car pool, van-pool or mass transit. Out-of-pocket parking fees for parking meters, garages and lots qualify. Parking at or near your home is not an eligible expense.
  • Ride Sharing: uberPOOL, Lyft Line and Via rides associated with a participant’s daily commute qualify as a commuter eligible benefit. Simply request a ride from via the appropriate app, select The Difference Card as the payment method and start saving.

The Internal Revenue Service (IRS) determines the maximum amounts members can contribute to their Commuter Account.

San Francisco Bay Area, CA Mandated 50 or more full time employees
Los Angeles, CA Mandated 50 or more full time employees
Seattle, WA Mandated 20 or more full time employees
Washington, D.C. Mandated 20 or more full time employees
New York, NY Mandated 20 or more full time employees
New Jersey Mandated 20 or more full time employees
National Available in all states, mandated in select cities & states Available to employers of any size


Is there a limit to how much I can contribute?

Yes. Monthly limits are set by the IRS. Currently, contributions for transit and vans pooling are limited to $300 per month. Parking contributions are limited to $300 per month. Any monthly expenses above these limits cannot be exempt from taxes and cannot be applied to future months.

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Advantages of a Commuter Account

A Commuter Account is a convenient and affordable way for participants to cover commuter expenses. The contributions to a Commuter Account are pre-tax, so participants will pay less in taxes and have a larger “take-home” paycheck. Contributions to a Commuter Account are free from federal and state income tax, Social Security and Medicare taxes and remain tax-free when they are reimbursed for eligible expenses. Besides being a tax-favored vehicle, mass transit commuter benefits accounts are advantageous because the funds last as long as you need them. Since the money is not linked to a benefit year, it will roll over into the next year until the participant spends it.

A young woman with headphones, listening to music on her phone on the train

Features of a Commuter Account from The Difference Card

The Difference Card makes it easy for members to use their Commuter Account funds. Each member will have a Difference Card, which they can use at the time of payment to cover their bus voucher, parking pass or other qualifying commuting expense.

Members can also use their personal funds to cover the costs, then request a reimbursement from The Difference Card. The funds in a Commuter Account are immediately available to spend.


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