What parking and transit expenses are eligible?
Pretax commuter benefits let you save on taxes when you spend on transit and parking to get to work. For most employees, that works out to about 20% in tax savings on eligible commuter spending.
Transit
If you tap, swipe, or buy a pass, token, fare card, or voucher to get to and from work on a transit system, you can use pretax dollars. Eligible spending includes:
- Subway
- Train
- Light rail
- Shuttle
- Bus
- Ferry
- Streetcar
- Vanpool (may require additional documentation)
Parking
Parking related to your commute is eligible. That covers parking near where you work and parking near where you connect to transit (for example, a train station parking lot). Eligible spending includes:
- Parking meters
- Parking garages
- Parking lots
- Parking apps
What is not eligible
- Tolls on highways and bridges (E-ZPass, I-Pass, etc.)
- Gas, fuel, and EV-charging costs
- Parking at your home
- Parking unrelated to getting to or from work
- Parking tickets
- Business-travel expenses
- Spending on behalf of a spouse, child, friend, or dependent
- Airline flights
- Bike-share and personal-bicycle costs
- Scooter sharing and micromobility
- Taxis
- Rideshare (Uber, Lyft, etc.)
Eligibility is set by IRC §132(f) and applies to commuting only.
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.
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.