What counts as "qualified parking" for the IRS commuter benefit?
Qualified parking under the federal commuter benefit rule (§132(f)) is parking you pay for at or near your workplace. It also covers parking at or near a stop where you catch transit, a vanpool, or a 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
- 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 or parking tied to a meal or event
- Any parking the employer provides for free (that's a different §132 exclusion)
- Tolls and gas
- Tickets and citations
The "near" rule
The IRS reads "near" in commonsense terms. A garage two blocks from the office, a lot next to the train station, or 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 about $1,000 a year (illustrative, at a 25% combined rate). The employer captures roughly 7.65% FICA savings on the same election.
Need help?
Talk to sales: sales@thisisalice.com or (929) 552-4625.
For the full list of eligible commuter expenses, see What parking and transit expenses are eligible? 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 by the IRS.
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. It is income tax you keep, not a cash payment from Alice, your employer, or any third party. Alice does not provide cash back, rebates, or any direct financial benefit in connection with the Program. Alice does not provide tax, legal, or financial advice. Consult your own tax preparer, lawyer, or financial advisor for guidance specific to your situation.
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