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How does pre-tax savings work?
The money that pays for your pass and/or parking comes from your pay, and is taken out before federal income tax, FICA (Social Security), and state income tax (in most states) are deducted. Because you don't pay taxes on this money, you can see your savings each month on your paycheck - in the form of reduced tax withholding.
Do I have to report this on my tax returns?
No. The IRS does not require any reporting for this type of program.
Are there spending limits or deadlines?
There is a limit to how much you can save through this program: For 2010, the IRS rules that govern the program allow a tax-free maximum of $230 per month for transit expenses and $230 per month for parking expenses. However, there's no limit to the convenience you can enjoy.
If your commuting costs exceed these amounts, the program draws the extra funds from your after-tax pay - so you can still get all the benefits of automatic pass orders and parking payments. And, you can sign up, make changes, or stop participating in the program whenever you choose. So unlike some other pre-tax programs, you don't need to worry about spending your account by the end of the year.
When do I get my pass?
Each month, your transit pass or tickets will be delivered before the month in which it is valid. If you use a SmartCard or other electronic pass, it will be reloaded automatically.
If you pay for your commute-related parking through the program, your payment for each month will be made before the beginning of the each month.
Passes and payments are very rarely delivered late. If this does happen, and your transit pass still hasn't come by the first business day of the benefit month, call WageWorks as soon as possible (no later than the third business day of the month) at 877-WageWorks (877-924-3967).
When can I enroll?
You can enroll at any time. Because the program has monthly enrollment deadlines set by your employer, the month you begin to receive your benefit depends on which day you enroll. You can also cancel at any time before the monthly cutoff; your cancellation will become effective on the same schedule. Visit www.wageworks.com for the details of your program.
Are there any fees?
Not to you. While there are administrative costs associated with running the program and delivering your passes, those costs are entirely covered by your employer as part of the benefits package you receive. You pay absolutely no fees, to WageWorks or your employer.
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