Q.- We offer a Parking Reimbursement Plan under Section 132 of the Code. Employees contribute amounts on a pre-tax basis to the plan and can use those amounts to pay for their parking expenses for driving to work. If an employee terminates employment but has money in his account, can he get the money back? What if he no longer drives to work but still has money in the plan?
A.- Any amounts already contributed to the plan cannot be refunded, but the unused portion can be carried over and used in subsequent years as long as the amount spent in future years does not exceed the annual limit for that year. If the employee terminates employment with money in the plan, the money is forfeited. If the employee stops driving to work with money in the plan, the money remains available and rolls over to future years to be available for future parking expenses.