Receive a Pre-Tax Salary Reduction
Pre-Tax Salary Reduction
Federal tax law allows the Massachusetts Institute of Technology, like many other employers, to sponsor a program under which employees can pay on a pre-tax, salary reduction basis for qualified parking and T-passes, up to certain monthly limits. By paying for those expenses on a salary reduction, pre-tax basis, employees receive tax savings.
Overview of Benefits
Who Is Eligible
All regular MIT employees are eligible to participate in this plan, with the following exceptions:
- Individuals who work at MIT but who are not paid directly by MIT
- Employees of temporary agencies
- Students whether or not working at MIT
- People paid with a purchase order.
"Qualified Parking" is limited to parking in MIT parking facilities. Because parking at MIT facilities is currently subsidized by MIT, the current monthly limit on the pre-tax payment of qualified parking expenses is $230.00. (The cost of a Regular Commuter permit is generally allocated over 11 months: for example, $79.27 per month for the 2009-2010 plan year.)
"Qualified Parking" includes the following types of MIT parking. Because of tax rules requiring the forfeiture of unused salary reduction amounts, these are the only types of employee parking eligible under this plan.
- Regular Commuter
- Car Pool (one member because of tax law requirements)
- Retired Faculty (with compensation)
- Occasional Parking
If you elect to have the cost of eligible monthly parking deducted directly from your pay by MIT, your pay will be automatically reduced by the cost of the MIT parking, unless you specifically elect otherwise, in writing, before each October 1st.Changing Your Pre-Tax Election
Generally, you may not change your election under this program during the plan year, unless you demonstrate to the satisfaction of the Parking and Transportation Office that a change in circumstances has occurred that justifies the proposed change, and the Parking and Transportation Office determines that the proposed change is permissible under applicable law relating to the program. Consequently, you are prohibited from enrolling in, canceling or making any changes in your election outside of the annual enrollment period, except for circumstances such as those listed below:
- New employee
- Move to new location results in change in commuting cost
- Vacation (applies to T-pass or MBTA Commuter Rail passes only)
- Begin or end leave of absence/sabbatical
- Termination of MIT employment
- Qualified parking or transit becomes available (MIT parking space or new bus/commuter rail line becomes available)
To make a change in your transportation election outside of the annual enrollment period, an election form must be received in the Parking and Transportation Office.Forfeitures
Except for the circumstances listed above, if you elect to purchase your MIT parking sticker or T-pass on a pre-tax basis and you do not use the elected amount for the month to which that election relates, you will forfeit the unused amount.
Because of the risk of forfeitures, it is very important that you carefully consider salary reduction amounts.Change to Parking Pass
You must submit your election form before the end of a month in order for the change to take effect in the following month. If you have any questions about making changes to our pre-tax parking election, please send them to firstname.lastname@example.org, or call the Parking and Transportation Office at 617-258-6510.Electing to Participate – Additional Information
If you would like to participate in the program or need any further information, please contact the Parking and Transportation Office at 617-258-6510 or 617-253-7276 or send an e-mail to email@example.com before October 1. Salary reduction elections under the program must generally be made before October 1st of the year in which the reductions will take place. For example, if you would like to pay for qualified parking under the program in the 2009-2010 Plan Year, you would need to submit your election form no later than October 1, 2009.