The public transit subsidy program — so-called because it primarily involves use of public transportation in commuting, although use of van pools and similar arrangements also are covered—has been in operation for many years in many agencies. However, because of funding and other constraints, policies vary among agencies and among locations for these commuter benefits even within agencies.
Executive Order 13150 of 2000 required that all federal employees in Washington, D.C., and its immediate suburbs receive a tax-free monthly benefit equal to their commuting costs up to a maximum of $310 (in 2023) in the form of passes or vouchers purchased by the agency. In addition, some agencies provide these benefits to their employees nationwide.
Federal employees who do not receive a direct subsidy generally are permitted to reduce their pre-tax income by an amount equal to their transit or van pool expenses up to the maximum. The agency accumulates these withholdings and purchases the vouchers, passes, or fare media on behalf of the employee, and then distribute them to the participating employees.
Similar benefits may apply in agencies outside the executive branch under their own policies.
Office of Management and Budget guidance (M-07-15) requires certain minimum controls that agencies must have over their programs. These include certifying that employees are eligible for the subsidy, warning them against making false statements in benefit applications, having the approving official verify that the employee’s costs are calculated correctly, checking applicants’ names against those of employees who receive benefits to park at their place of work, adjusting benefits according to travel, leave or change of address, and making sure that the benefits end when the employee leaves the agency.
Parking subsidies included in commuter benefits
Further, agencies may elect to reimburse employees for their qualified parking expenses at or near transit stations, park-and-ride lots, or vanpool staging areas, using employee pre-tax salary funds, up to the same maximum.
Appropriated funds may not be used for these purposes unless exceptional circumstances exist. Parking costs are treated separately from transit costs, even if they are incurred in conjunction with an employee’s use of public transit or vanpools. Agencies may also provide such parking at the agency’s office for van pools and car pools.
Agencies that make cash reimbursements for parking must establish a bona fide reimbursement arrangement to establish that their employees have, in fact, incurred such expenses. Agency provision of single occupancy vehicle parking is not consistent with the intent of the executive order, but may be permitted under other authority.