1601 - Third Party Pre-Tax Parking Reimbursement Account Program Policy

Category

Third Party Pre-Tax Parking

Audience List

• Employee Benefits Officers
• Personnel Officers
• Personnel Transactions Staff
• Personnel Transactions Supervisors

Synopsis

This policy:

• Provides general information about the program and the monthly limit for the third party pre-tax deduction from an employee’s income to pay for qualified parking.
• States the monthly pre-tax deduction amount for the current calendar year.

Introduction

The California Department of Human Resources (CalHR) administers the Third Party Pre-Tax Parking Reimbursement Account Program (Program).

The Program is a voluntary payroll deduction program that allows participants to deduct a specific dollar amount for work-related parking fees from their pay warrants prior to tax deductions, which reduces their taxable income.

The funds taken out of a participant’s pay warrant go into a pre-tax parking reimbursement account that the participant will claim against.  To receive payments from the account, participants must submit a reimbursement claim form (CalHR 681 - Pre-Tax Parking/Third-Party Administrator/Reimbursable Account Claim [CalHR 681]) along with the required parking receipts.

Statement

State employees who do not have access to state controlled/owned (Department of General Services [DGS], Department of Transportation [CalTrans], etc.) parking spaces or a department-sponsored parking program are eligible to enroll in the Program.

Monthly Deduction Amount

Participants can deduct their actual cost of parking, up to the maximum amount allowable by the Internal Revenue Service (IRS). CalHR's Third Party Pre-Tax Parking Reimbursement Account Program page lists the current maximum amount allowable.

Application

Eligibility

The following active state employees who meet the eligibility criteria may participate in the Program:

• Rank and file
• Managerial
• Supervisory
• Confidential
• Excluded (including: Constitutional Officers; employees of the Judicial Council; and Supreme, Appellate, and Superior Court Judges)

Participants must meet the following eligibility criteria:

• Drive a personal vehicle to work or to a location from which they commute to work.
• Pay for employment-related parking in a paid facility providing a receipt.
• Not have a DGS-administered or department-administered parking space.

The state limits the number of pre-tax parking deductions to one (1).  Certain situations, such as an employee having appointments with more than one department in different locations which require a parking space in those locations, may be an exception to this policy.

Participant eligibility begins the first month following the first payroll deduction for the Program (Internal Revenue Code requirement).

Enrollment

To enroll, participants must complete the CalHR 682 - Pre-Tax Parking/Third-Party Administrator/Reimbursable Account Enrollment and submit it to their personnel office.

• Deduction will start in the current pay period if the State Controller’s Office (SCO) Miscellaneous Deduction Unit (MDU) receives the CalHR 682 by the 10th of the month.
• The Program does not allow retroactive pre-tax parking deductions.
• A deduction not taken in the pay period requested will start in the next pay period.

Changes to Enrollment

• Participants may increase or decrease their pre-tax parking payroll deduction at any time by completing the CalHR 682 and submitting it to their personnel office.
• Changes start in the current pay period if SCO's MDU receives the CalHR 682 by the 10th of the month.
• The Program does not allow retroactive pre-tax parking deductions.
• A deduction not taken in the pay period requested will start in the next pay period.

Cancellations

• Participants may cancel their pre-tax deduction at any time by completing the CalHR 682 and submitting it to their personnel office.
• The deduction will stop with the current pay period if SCO's MDU receives the CalHR 682 by the 10th of the month.  The Program does not allow retroactive pre-tax parking cancellations.
• A deduction not cancelled in the pay period requested will stop in the next pay period.
• Cancellation requests submitted after the 10th of the month but before the next period of eligibility (the first of the next month) may be eligible for a refund of the month in question (see Refunds).

Claims Process

The process for submitting reimbursement claims is as follows:

• The authorized pre-tax parking account deduction from a participant’s pay warrant occurs every month.
• The deduction for that pay period is always for the next month's parking fees (e.g., the deduction taken in the July pay period is for the month of August's parking fees).
• Participant pays parking fees and receives a receipt for all "qualified" parking expenditures for the month.
• Participant completes and signs the CalHR 681. The participant’s signature on the claim form certifies that the reimbursement requested is for "qualified" parking and that all eligibility criteria has been met.
• Participant forwards the completed CalHR 681 along with the required payment documentation to the current third party administrator, Application Software Inc. (ASI), for processing at the address listed on the form. Reimbursement claims received by the 15th of the month will be included in that month's processing cycle.

Claims may be submitted as soon as parking fees are paid; there is no need to wait until the end of each month.  SCO typically mails out the pre-tax parking reimbursement warrants once a month towards the end of the month; direct deposit is also available.

Refunds

CalHR reviews refund requests on a case-by-case basis. Refund requests are not permitted for current participants in the Program or for participants who have a pending reimbursement claim on file.

There are certain circumstances where a participant may be eligible for a refund (for example, if a participant becomes disabled or if there is a delay in processing a cancellation request).

Approved refunds are issued by check or direct deposit. Refunds are not included in the participant’s regular paycheck. Since the initial deduction is done pre-tax, SCO is required to withhold taxes for approved refunds.

Forfeiture Information

• Active state employees have one (1) year from the last date of activity (deduction or submission of a claim) in which to submit a claim with valid parking receipts for reimbursement.  Claims must reflect costs incurred during the participant’s period of eligibility in the Program.  Costs incurred after the last date of eligibility are not eligible for reimbursement.
• Employees separated from state service have one (1) year from their date of separation in which to submit a claim for reimbursement of work-related parking expenses incurred prior to separation.  Claims must reflect costs incurred during the participant’s period of eligibility in the Program.  Costs incurred after the last date of eligibility will not be processed.
• Any remaining funds will be forfeited to the state if valid claims have not been submitted according to policy.

Parking Lot Transfers

The Program differs from DGS or department-sponsored parking programs in the way that it is coded and processed. Participants must cancel from the Program when they transfer from a private parking lot to a DGS or department-sponsored lot. Without the appropriate cancellation request submitted, a duplicate pre-tax parking deduction will take place, which increases the likelihood that the participant will forfeit unclaimed pre-tax parking funds.

Authorities

• Bargaining Contracts - MOUs
• Government Code section 1156.1
• Government Code section 18502
• Internal Revenue Code section 132(f)

Resources

FAQs

• Pre-Tax Parking: Frequently Asked Questions

Forms

• CalHR 681: Pre-Tax Parking/Third-Party Administrator/Reimbursable Account Claim
• CalHR 682 : Pre-Tax Parking/Third-Party Administrator/Reimbursable Account Enrollment

Web Pages

• Benefits Administration Manual section 2203: Pre-Tax Parking Program
• Third Party Pre-Tax Parking Reimbursement Account Program: Third Party Pre-Tax Parking Reimbursement Account Program

Authorized By

Benefits Division
Benefits Division Inquiries, Benefits Division

Contact Person

Pre-Tax Parking Program
CalHR
Phone: 916-322-0300
Email: Pre-TaxParking@calhr.ca.gov

Superseded Policies

History

View History