print logo
Main Content Anchor

Pre-Tax Parking Program

Content

2201. General Information

The pre-tax parking program is a voluntary payroll deduction program that allows employees to deduct a specified pre-tax dollar amount for work-related parking fees. Money is deducted from the employee's paycheck prior to tax deductions. As a result the employee's taxable income is reduced. Once the employee's pre-tax parking deduction is established, it continues without interruption until terminated or changed by the employee. At the end of the tax year, the SCO will report the employee's taxable income as usual and excludes the amount of the pre-tax parking reimbursement deduction from their gross taxable income.
 
Unless an employee has appointments with more than one department in different locations or the employee's duties require him/her to parking in different locations, State employees are limited to one (1) parking space each.

 

Three types of pre-tax parking payroll deductions

  1. Department of General Services (DGS) This pre-tax parking payroll deduction program is available to any State employee who can acquire a parking space in a State-owned garage and/or parking lot managed by DGS. This program is administered by DGS, Office of Fleet Administration (OFA).
    • The State Controller's Office (SCO) deducts the parking fees from the employee's check and remits them directly to DGS/OFA. It is the only parking payment made on behalf of the employee for their parking. SCO's deduction code for the DGS/OFA parking deduction is 360-001.
  2. Department Sponsored Parking
    • Departments that have "in-house" parking programs administer their own programs. The deduction codes for these programs are setup by the SCO Deduction Program Coordinator. The departments enroll employees using their unique deduction code 360-xxx. SCO deducts the parking fees from the employee's check and transfers them to the department. Department pays the parking for each employee.
  3. Pre-Tax Parking Reimbursement Account Program
    • This program is for employees who do not have access to DGS/OFA parking spaces or a department sponsored parking program. While an employee can have his/her parking fees deduced pre-tax from his/her paycheck, he/she must first pay for the parking directly to the parking facility and get a receipt. The employee then submits a claim to a third party record keeper for reimbursement.
 
The Pre-Tax Parking Reimbursement Account Program is administered by the California Department of Human Resources (CalHR). CalHR contracts with a third party administrator (TPA) for record keeping and claims adjudication. SCO's deduction code for the Pre-Tax Parking Reimbursement Account Program is 361-001.
 

2202. Authority

The Pre-Tax Parking Program is regulated by Section 132 (f) of the Internal Revenue Code (IRC) - Qualified Transportation Fringe Benefits.
 

"Qualified parking" defined by the IRC:

Parking on or near the employer's business premise or at a location from which the employee commutes to work by carpool, commuter highway vehicle, mass transit facilities, transportation provided by any person in the business of transporting persons for compensation or hire, or by any other means.
 
California Revenue and Taxation Code Sections 17131, 17144.5 and 17149
California Unemployment Insurance Code Sections 938.3, 13006, 13009 and 13009.5
State of California Memoranda of Understanding
California Government Code Section 1156.1 and 19849.10
Department of Personnel Administration PMLs 2000-024, 2001-067, 2002-74, 2004-008
 

2203. Benefit/Maximum Deduction

An employee can deduct the actual cost of parking, up to $255/month, for the 2016 tax year. The maximum deduction is set by the Internal Revenue Service (IRS). If the employee's pre-tax parking deduction exceeds the maximum deduction for the year, SCO will add the excess to his/her taxable income prior to the production of the W2 for the tax year.
 

2204. Eligibility

All Active State employees designated rank and file, managerial, supervisory, confidential, and excluded including: Constitutional Officers, employees of the Judicial Council, and Supreme, Appellate, and Superior Court Judges are eligible to participate in one of the three Pre-Tax Parking Programs.
 
Eligibility criteria specific to the Pre-Tax Parking Reimbursement Account Program are:
  1. employee drives a personal vehicle to work or to location from which he/she commutes to work; and
  2. employee pay for employment-related parking in a paid facility providing a receipt; and
  3. employee does not have a DGS-administered or department-administered parking space.
 

2205. Effective Date

Eligibility begins the first month following the first payroll deduction (IRC requirement).
 

2206. Enrollment

DGS/OFA Administered Parking

Employee who acquires a DGS parking space must complete the "Application For Parking" form (OFA 112) and submit it to their Departmental Transportation Coordinator (DTC) or Employee Parking Unit (EPU) for processing. The employee pays parking fees in advance to cover the period prior to start of the first payroll deduction. The advance payment must be by check, money order, or credit/debit card (Sacramento only).
 
The DTC then forwards the completed OFA 112 form to DGS/OFA. Upon receipt of the employee's OFA 112 form, OFA completes the State Controller's Office (SCO) "Notice to State Controller of Payroll Authorization" form (CD88) and forwards it to the SCO's Miscellaneous Deduction Unit by the 10th of the month.

Department Sponsored Parking

Employee completes the parking facility's application and pays parking fees in advance to cover the period prior to start of the first payroll deduction. The employee may also be required to pay a refundable deposit for a key card to the parking facility.
 
The employee gives a copy of his/her parking facility application to his/her department's DTC or the unit responsible for the department's parking program. Upon receipt of the employee's application, the DTC or Parking Unit completes the SCO's CD88 and forwards it to SCO's Miscellaneous Deduction Unit by the 10th of the month.

Pre-Tax Parking Reimbursement Account Program

Employee completes a Pre-Tax Parking/Third-Party Administrator/Reimbursable Account enrollment form (CalHR 682) and submits it to his/her Personnel/Payroll Office. To be effective for the current pay period, the enrollment form must be processed and forwarded to SCO's Miscellaneous Deduction Unit by the 10th of the month.
 

2207. Claims Process

If an employee is participating in the Pre-Tax Parking Reimbursement Account Program, the process for submitting reimbursement claims is as follows:
  1. Specified pre-tax reimbursement account dollar is deducted from the employee's check. The deduction is always for the next month (e.g., the deduction taken in March pay period is for the month of April).
  2. Employee pays his/her parking fees and receives a receipt for all parking expenditures for the month (e.g., monthly, weekly or daily receipts).
  3. Employee completes a Pre-Tax Parking/Third-Party Administrator/Reimbursable Account claim form (CalHR 681). The employee's signature on the claim form attests that the reimbursement is for "qualified parking" and that he/she meets the eligibility criteria.
  4. The employee sends the completed reimbursement claim along with the required payment documentation (receipt, copy of money order, copy of cashier's check, or copy of the front and back of cancelled personal check) to the third party administrator at the address listed on the form for processing.
  5. The Pre-tax Parking Reimbursement checks are mailed once a month at the end of the month. Employees must submit claims to the third party administrator by the 15th of the month to be included in the monthly processing cycle.

2208. Changes

When there is a change to the parking fees of the parking programs administered by DGS/OFA or department, DGS/OFA or the department makes the change to the employee's payroll deduction by completing SCO's CD88 following notification to the employee. The effective date of the change will be the current pay period if the completed CD88 is received by the SCO's Miscellaneous Deduction Unit by the 10th of month.
 
An employee participating in the Pre-Tax Parking Reimbursement Account Program may increase or decrease their pre-tax parking reimbursement account deduction at any time by completing an Enrollment/Change form (CalHR 682) and submitting to his/her Personnel/Payroll Office. The effective date of the change will be the current pay period if the form is received by SCO's Miscellaneous Deduction Unit by the 10th of the month.
 
If an employee is changing from a Pre-Tax Parking Reimbursement Account Program to a DGS/OFA or department parking program or vice versa, the employee must cancel their current program before enrolling in the new program to avoid duplicate deductions and possible forfeiture of pre-tax parking funds. See Section 2209, Cancellation, Section 2210, Forfeiture, and Section 2213, Employee Transfer, for details.
 

2209. Cancellations

If an employee participates in a parking program administered by DGS/OFA or a department, he/she must give 30 days notice to cancel his/her pre-tax parking deduction. DGS/OFA or the department completes SCO's CD88 and forwards it to the Miscellaneous Deduction Unit. If the CD88 is received by the 10th of the month, the cancellation is effective in the current pay period.
 
An employee participating in the Pre-Tax Parking Reimbursement Account Program may cancel his/her pre-tax deduction at any time by completing the Enrollment/Change form (CalHr 682) and submitting it to his/her Personnel/Payroll Office. The cancellation will be effective the current pay period if the form is received by SCO by the 10th of the month. If funds remain in the employee's Pre-Tax Parking Reimbursement Account and he/she is still an active State employee, the employee has one (1) year from his/her last activity (deduction or claim) in which to submit claims for reimbursement of work-related parking or the remaining funds will be forfeited.
 
Because the Pre-Tax Parking Reimbursement Account Program differs from the DGS/OFA or department sponsored parking program in the way that they are coded and processed, the employee must cancel his/her reimbursement account deduction when he/she transfers from a private parking lot to a DGS/OFA or departmental administered lot or vice versa. Otherwise, the employee will have duplicate pre-tax parking deductions taken from his/her paycheck and could face forfeiture of his/her unclaimed pre-tax parking funds.
 

2210. Forfeiture

If an employee participating in the Pre-Tax Parking Reimbursement Account Program cancels his/her pre-tax payroll deduction and has a balance in his/her account, the employee, as an active State employee, has one (1) year from the date of his/her last activity (deduction or submission of a claim) in which to submit a claim with valid parking receipts for reimbursement. Claims must reflect costs incurred while the employee was an active participant in the Program. Costs incurred after the employee's last date of eligibility are not eligible for reimbursement.
 
If the employee has separated from State service and has a balance in his/her Pre-Tax Parking Reimbursement Account, he/she has one (1) year from date of separation in which to submit a claim for reimbursement of work-related parking expenses incurred prior to separation. Costs incurred after the employee's last date of eligibility are not eligible for reimbursement.
 
Failure to submit pre-tax parking reimbursement account claims within these specified time periods will result in the forfeiture of these funds.
 

2211. Leave of Absence

When an employee is on a leave of absence (LOA), the pre-tax parking deduction will continue if there is "sufficient gross" pay. If an employee is on Industrial Disability Leave (IDL) and receiving non-taxable income, the pre-tax parking deduction ceases.

DGS/OFA Administered Parking

If an employee is on a LOA for more than 90 days, the DGS/OFA usually requires the employee to cancel his/her pre-tax parking deduction. Each situation is evaluated on a case-by case basis.

Department Sponsored Parking

Depending on the agreement between the department and the owner of the parking garage/parking lot, any employee on a LOA for more than 30 days is usually required to cancel his/her pre-tax parking deduction.

Pre-Tax Parking Reimbursement Account Parking

Since the Pre-Tax Parking Reimbursement Account Program deduction can be cancelled and started at any time during the tax year, the pre-tax parking deduction should be cancelled when the employee is on a LOA of 30 days or more.
 

2212. Employer Transfer

The pre-tax parking payroll deductions for both the DGS/OFA and the Pre-Tax Parking Reimbursement Account programs continue when an employee transfers from one department to another department. When the employee's former department processes his/her paperwork, it should ask if he/she will need to continue the pre-tax parking payroll deduction.
  • If the employee will not be required to pay for parking at his/her new department or will be participating in a department sponsored pre-tax parking program, he/she should be reminded to cancel his/her pre-tax parking payroll deduction.
  • If the employee has a pre-tax parking deduction for the DGS/OFA program, he/she must notify DGS/OFA and it will complete SCO's CD88 to cancel the deduction.
  • If the employee has a pre-tax parking deduction for the Pre-Tax Parking Reimbursement Account program, he/she must complete an Enrollment/Change form (CalHR 682) to cancel his/her deduction and give to his/her former department's Personnel/Payroll Office to process and forward to the Miscellaneous Deduction Unit at SCO.

2213. Retroactive Enrollment

Retroactive pre-tax parking deductions are not allowed under the Pre-Tax Parking Program. If the deduction is not taken in the pay period that is requested, the deduction will start in the next pay period.
 

2214. Refunds

CalHR reviews refund requests on a case-by-case basis. Refund requests are not permitted for current participants in the program or for participants who have a pending reimbursement claim on file.
 
The IRC does not allow automatic refunds of pre-tax parking deductions. However, there may be circumstances in which an employee is due a refund (e.g. disability, death delaying in processing cancellation). The request for refunds will reviewed on a case by case basis by the appropriate program administrator (DGS/OFA, Department or CalHR).
 
If an employee is parking in a DGS/OFA parking space or a department sponsored parking space and is eligible for a refund, DGS/OFA or the department will complete SCO's "Parking Adjustment Notice" (PPSD 360) and forward it to the Miscellaneous Deduction Unit of SCO.
 
If an employee is participating in the Reimbursement Account Program, his/her Personnel Office will forward a memo to the Program Coordinator requesting a refund. If the refund is approved, the Program Coordinator sends a memo to SCO's Miscellaneous Deduction Unit authorizing the refund.
 
The refund is issued to the employee either by check or direct deposit. It is not included in the employee's regular pay warrants. SCO will withhold the required taxes from the refund.
 

2215. Separation or Retirement

The employee's pre-tax parking deduction stops. If the employee is participating in the Pre-Tax Parking Reimbursement Account Program and there are funds remaining in his/her account, he/she can submit a claim for reimbursement of work-related parking expenses incurred prior to separation. The employee has one (1) year following separation or retirement in which to submit a reimbursement claim or the remaining funds will be forfeited.
 

2216. Beneficiary

If the employee was participating in the Reimbursement Account Program, any reimbursement claims submitted for work-related parking expenses incurred prior to an employee's death will be paid to his/her beneficiary or estate. The beneficiary or estate has one (1) year following the employee's death in which to submit claims for reimbursement or the funds will be forfeited.
 

2217. Contact

Contact

Ray Asbell, ray.asbell@calhr.ca.gov, 916-324-0526
 

2218. Website

Additional information on the Pre-Tax Parking Programs as well as the Enrollment/Change Form (CalHR 682) and the Reimbursement Claim Form (CalHR 681) for the Pre-Tax Parking Reimbursement Account Program is available on the CalHR web site.
 
Additional information on the availability of parking spaces managed by DGS/OFA as well as its Parking Application (OFA 112) is available on the DGS/OFA web site.
 
SCO's CD88 and PPSD 360 forms are available on the SCO web site.
  Updated: 1/4/2016
One Column Page
Link Back to Top