This program allows you to use pre-tax dollars to pay for certain eligible transportation expenses that you incur commuting to work.
According to IRS rules, two types of expenses qualify for this program:
- Qualified parking expenses—Expenses to park at or near your place of work, or expenses for parking at a location from which you use mass transportation or a vanpool to commute to and from work. The maximum amount of your pre-tax election for mass transportation is $255 per month; and
- Eligible mass transportation expenses—Public transportation costs of getting to and from work. This includes transit passes; bus, train or trolley fares; or vanpool costs. These expenses do not include parking. The maximum amount of your pre-tax election for mass transportation is $255 per month.
You can have both parking and mass transit expenses. You cannot, however, combine the qualified parking limit and the mass transportation expense limit into one overall limit. Examples of eligible expenses in both categories include paying to park at a park-and-ride station and then for mass transit to work, or driving to work and paying for parking on certain days and taking the bus on other days.
To participate in the program, you must complete an Enrollment Form and submit it to the Alcoa Service Center. (Employees who park in the Alcoa Corporate Center will automatically participate in the program, unless they elect not to.) You specify the amount you want applied on a pre-tax basis for eligible transportation expenses. Each pay period, your reportable taxable wages will be lowered by the amount of your pre-tax election.
If you enroll in the program, your election will take effect on the first day of the pay period following receipt of your form. For example, forms submitted prior to May 1 will become effective with the May pay period.
You do not need to re-enroll each year unless your eligible expenses change. If you have a change in circumstances that affects your commuting arrangement, you can make a new election. For example, if you move to a new residence and bus service is no longer available, or if you gain or lose access to a parking lease, you would need to complete and submit a new enrollment form.
You pay your transportation expenses as usual. You should maintain documentation of your paid transportation expenses in the event of an IRS audit. Documentation might include parking receipts, used bus passes, or canceled checks or credit card receipts. If a receipt is not ordinarily provided, you should keep a written record of dates and expenses.
Your actual income or earnings will not be reduced by your election, only your tax liability. Your Form W-2 reportable taxable wages will be lowered by the amount of your pre-tax election.
For Social Security purposes, your earnings base will be slightly lower, which may or may not affect the ultimate calculation of your Social Security benefit. You may wish to contact your tax advisor to determine how this benefit will impact your individual situation.
Expenses Not Covered
Certain expenses are not covered by the program. These include:
- Expenses submitted for reimbursement through Alcoa’s travel and expense program;
- Expenses submitted through another employer’s plan (such as the employer’s plan for your spouse or another individual with whom you share a ride);
- Expenses that have been submitted or incurred by someone else;
- Cost of gasoline or other expenses related to operating your vehicle;
- Tolls incurred while traveling to and from work;
- Mileage; and
- Parking at or near your residence that is not related to commuting.