Qualified Transportation Plans are offered by employers to assist employees with the cost of commuting to and from work. A qualified transportation plan is a reimbursement plan under section 132 of the Internal Revenue Code through which employees make pre-tax contributions to be used for transit and parking expenses.
A taxpayer recently queried the IRS and asked that bike-share expenses be considered a qualified transportation expense eligible for reimbursement from a Code section 132 account. The IRS issued a chief counsel memo holding that a bike-share arrangement is not transit, and therefore not eligible for reimbursement under a Code section 132 account. The IRS did recognize that this outcome might require modification, so the issue was forwarded to the Orrice of Tax Counsel for future congressional action.