What counts as "qualified parking" for the IRS commuter benefit?

Meta description: Qualified parking under IRC §132(f) covers garages, lots, meters, and parking apps near work or near a commute transit stop. Here's the full rule.

Target keywords: qualified parking IRS, §132(f) parking, pretax parking eligibility, what counts as qualified parking

Footnote stack: Eligibility, IRS limits, Savings estimates, Tax & legal advice

Body

Qualified parking under IRC §132(f) is parking the employee pays for at or near the workplace, or at or near a location from which the employee commutes to work by mass transit, vanpool, or carpool. The 2026 monthly exclusion is $340. The expense must be the employee's, not the employer's.

What's in

Garages (commercial parking structures), surface lots, on-street parking meters, parking apps (ParkMobile, SpotHero, PayByPhone, Premium Parking, and similar apps used to pay for qualified parking), park-and-ride lots near transit stations, and monthly parking permits.

What's out

Parking at the employee's residence, parking at a non-commute destination (a gym, a friend's house, an entertainment venue), valet/parking tied to a meal or event, and any parking the employer provides for free (that's a different §132 exclusion). Tolls and gas are not eligible. Tickets and citations are not eligible.

The "near" rule

"Near" the workplace or "near" a transit stop is interpreted by the IRS in commonsense terms. A garage two blocks from the office, a lot adjacent to the train station the employee uses, an app-paid spot down the street, all qualify. Parking 30 miles away from both work and any transit stop the employee uses generally doesn't.

Documentation

Alice Card transactions at qualifying parking merchants are substantiated automatically by the platform. Employees don't need to keep paper receipts for routine swipes. For unusual transactions, the platform may ask for additional information.

Why this matters

A worker maxing the parking benefit saves up to ~$1,000/year (illustrative, at a 25% combined rate). The employer captures roughly 7.65% FICA savings on the same election. Save on taxes on every eligible parking dollar.

Employers: sales@thisisalice.com or (929) 552-4625. Employees: support@thisisalice.com or (888) 431-4355.

For the full list of eligible commuter expenses, see "What parking and transit expenses are eligible?" at help.thisisalice.com/article/52. Eligibility is set by IRC §132(f). Figures shown are for the 2026 plan year and are set by the IRS. Limits are indexed annually; we update this article each November when the IRS issues the following year's Revenue Procedure. Savings shown or implied, including any reference to "cash back" or take-home pay, are illustrative. Actual savings depend on your tax rate, benefit elections, and eligible spending each pay period. "Cash back" in Alice's materials refers to the federal, state, and FICA payroll taxes you don't pay on eligible commuter spending. Alice does not provide tax, legal, or financial advice. Consult your own tax preparer, lawyer, or financial advisor for guidance specific to your situation.