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It would be an understatement to say that many of us experienced major life changes during the pandemic. Many of us changed jobs, moved, and/or shifted to remote or hybrid work. Naturally, our commuting needs changed. It’s time our commuter benefits caught up.
Traditionally, pre-tax commuter benefits were always separated. You could set aside money for transit, and you could set aside money for parking, and these accounts were expected to be kept apart. If someone put a lot of money into transit and then suddenly wanted to use it for parking, the IRS said they were out of luck.
Since the pandemic, that’s exactly what happened to many commuters. Fortunately, the IRS issued guidance in 2020, and again in 2024, establishing that yes, our commuting needs have changed, so our commuter benefits will adapt. They allowed that yes, pre-tax transit funds can be redirected for parking, and parking for transit. All other rules are still in place, such as the $325 monthly cap for pre-tax parking and transit contributions, and the limits on qualified parking expenses. But the ability to transfer funds between parking and transit accounts is a significant change, and will have a huge impact for many commuters.
Jawnt is pleased to make this capability available to our customers through Jawnt Redirect.
Through Jawnt, employees can now move eligible pre-tax transit and parking funds between accounts.
In 2019, Jacelyn lived in San Francisco and commuted to her office every day on Caltrain. For years, she dutifully maxed out her monthly pre-tax transit contributions ($265 a month in 2019). Then the pandemic hit, and she began working from home. With everything going on, it didn’t occur to her to change her commuter benefit elections, so she accrued a considerable balance in her pre-tax transit account – over $1000. When her company began requiring people to come back to the office a few days a week, she decided driving in a few times a week wasn’t so bad. She just wished she could use all the money in her pre-tax transit account to pay for parking.
In 2019, this wouldn’t have been allowed. But today, Jacelyn’s company uses Jawnt to manage their commuter benefits, so she’s in luck. With Jawnt Redirect, Jacelyn can transfer up to $1000 a month between her transit and parking accounts. She can transfer funds as often as she wants, on a monthly basis. Ultimately, Jacelyn decided to transfer $800 from her transit account into her parking account (she does still live in San Francisco and rides Muni on weekends). She also updated her monthly deductions moving forward, to reflect her new preference for parking.
Do you or your employees have large balances in transit and parking accounts they no longer need or want? Contact Jawnt to learn how to give your employees the commuter benefits they’ll actually use and your administrators will love.
