Overview
Why participate in the TFA Plan?
How does the TFA Plan work?
What will it cost me to participate?
Since pre-tax dollars reduce Social Security taxes (FICA), won’t my Social Security be affected?
Does setting aside moneys in the TFA Plan affect any other benefits?
What happens if I no longer work here?
Who do I call for questions about the Plan, enrollment, account balances or claims reimbursement?
Examples of Allowed Expenses
What are allowable expenses for the Mass Transit Account?
What are allowable expenses for the Parking Expenses Account?
Enrollment
How do I get started?
If I miss this enrollment when can I enroll again?
Do I have to sign up each year?
When can I change my elections?
Can I transfer moneys between accounts?
Claims Processing
How do I submit a request for claims reimbursement?
Are there any limits to the amount I can be reimbursed?
Where can I get more forms?
Does the IRS "use it or lose it" rule apply?
What happens if I don't use all the money that I have set aside in the TFA Plan?
Account Balances
How will I know how much is in any of my accounts?
What happens if I don't use all the money that I have set aside in the TFA Plan?
Can I transfer moneys between accounts?
Overview
Why participate in the TFA Plan?
The TFA Plan is optional. There are tax advantages because you set aside pre-tax payroll deductions for health insurance premiums, out-of-pocket healthcare expenses, and child or dependent care costs. When you set aside these moneys on a pre-tax basis you lower your income taxes (FICA, federal and in most cases state and local) each paycheck and on your W-2. Based on your tax rate, savings may be anywhere from 25% to 40% of amounts deducted.
See How Do You Benefit from using pre-tax dollars.
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How does the TFA Plan work?
First you select the annual amounts to set aside. Each payroll, a deduction is taken in equal amounts based on the monthly election times 12 divided by the number of payrolls during the Plan Year. Some employers using bi-weekly payrolls will skip 2 deductions, so that the monthly amount is simply divided by 2. Then, you pay for your communting expenses as you would normally. On or before the 20th of each month, you can submit Form 8 - Transportation Fringe Account Reimbursement Form. Reimbursement checks are made payable to you and processed with the last payroll of the month (unless it falls between the 20th and 25th, which would be processed on the next payroll). Your reimbursement is limited to moneys credited to-date as being deposited with payroll deductions less amounts already paid to you.
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What will it cost me to participate?
All costs for set-up and administration are being paid by you employer. You only have to set aside moneys that you would be spending for yourself only for allowed mass transit or parking expenses during the Plan Year.
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Since pre-tax dollars reduce Social Security taxes (FICA), won’t my Social Security be affected?
Possibly, but not significantly. If your gross income less the annual elections is $102,000 or less in 2008 (thus reducing your 7.65% FICA and Medicare contributions). If over $102,000, then only your 1.45% Medicare contributions will be lower. Since you will be paying less FICA and Medicare today, the government provided benefits may be slightly lower when you retire. However, this impact is averaged over at least 10 years, may not be affected if you will be getting benefits from your spouse. Furthermore, the benefits contribution rate used for Social Security is based on interest rates, while your tax savings from using pre-tax dollars will be much greater. So if you are still concerned with your retirement, you can save in an IRA or Retirement Plan to easily offset the impacts. If you are still concerned with the impacts on your retirement, you can talk with your tax advisor, or contact us for assistance.
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Does setting aside moneys in the TFA Plan affect any other benefits?
No, the TFA Plan supplements other company provided employee benefits. No other company provided benefits are affected.
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What happens if I no longer work here?
In general, deposits made into your accounts can continue to be claimed eventhough you are no longer on the payroll. The only way to get money from an account is to submit a properly documented claim request.
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Who do I call for questions about the TFA Plan, enrollment, account balances or claims reimbursement?
For any inquiries about this Plan, or you account, simply contact BSI Administrative Services, Inc. by
Phone (973) 300-4274 (4BSI) or FAX 973-300-9329 (9FAX) or by E-Mail.
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Examples of Allowed Expenses
What are allowable expenses for the Mass Transit Account?
Qualified mass transit transportation up to $115 per month effective in 2008 for mass transit facilities between your residence and place of business. It includes purchase of tickets or transit passes (meaning any pass, token, farecard, voucher or similar item entitling a person to transportation). For example: MetroCards, PATH QuickCards, Commuter Rail Services (MTA, AMTRAK, LIRR, NJ Transit, Metro North), Ferry Services, Commuter Bus Services, etc.
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What are allowable expenses for the Parking Expenses Account?
Qualified parking expenses up to $220 per month effective in 2008 for parking near the business premises of the employer or on or near a location from which the employee commutes to work by mass transit (see above), in a commuter highway vehicle or by carpool. Such expenses would not include any parking used for residential purposes.
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Enrollment
How do I get started?
First decide on how much you estimate you will be spending (only for yourself) each month for Mass Transit and Parking. Then complete the Transportation Fringe Election Form (Form PR7). Submit all election forms to your Human Resources contact so that they may setup the first payroll deductions. Your company will provide BSI Administrative Services with a copy so we can prepare confirmation letters and update our records.
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If I miss this enrollment when can I enroll again?
There is open enrollment. You can start, change, or terminate your election at any time depending on your Employer's payroll processing schedule. However, you cannot claim reimbursement for periods prior to your start date.
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Do I have to sign up each year?
Not usually unless your Employer requires it. The IRS allows Mass Transit and Parking Expenses accounts to be automatically continued from year to year if you do not submit a new election form.
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When can I change my elections?
Mass Transit and Parking Expenses can be changed at any time by submitting a new Transportation Fringe Account Election form (Form PR7). While you can start, stop, increase or decrease your monthly elections at any time, the only way to get money from your account is to submit a properly completed claims form.
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Can I transfer moneys between accounts?
No, you cannot move moneys between accounts.
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Claims Processing
How do I submit a request for claims reimbursement?
The IRS rules require a written statement and proof of payment Keep original documents for your records, then submit copies directly to BSI Administrative Services, Attn: TFA Plan, 93 Spring Street, Suite 202, Newton, NJ 07860.
Use the TFA Reimbursement Form (Form PR8) to claim money from your accounts. Additional details are provided on Form PR8b - the Transportation Fringe Account Reimbursement Instructions as to how to complete these claims. You can call BSI Administrative Services should you have any questions about completing your claims forms.
Reimbursement checks are made payable to the employee are processed once a month. All requests received on or before the 20th of the month will be processed for distribution by your employer along with the last payroll of the month (or the next one after that if that payroll falls between the 20th and 25th).
Are there any limits to the amount I can be reimbursed?
Yes, the amount that may be reimbursed is limited to funds credited via payroll deposits to date into your account less amounts already paid. There are no minimums. Your reimbursements for any account during a Plan Year cannot exceed your annual election for that account.
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Where can I get more claims reimbursement forms?
While you can make copies of all forms, additional forms are available see GET MY FORMS.
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Does the IRS "use it or lose it" rule" apply?
No, there is no "use it or lose it" rule for the TFA Plan.
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What happens if I don't use all the money that I have set aside in the TFA Plan?
Unclaimed balances are carried over into the next period.
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Account Balances
How will I know how much is in any of my accounts?
Before we start you will get a confirmation letter showing the proposed payroll deductions. Otherwise, you will only get an annual statement for the Mass Transit and Parking Expenses if you have balances remaining at the end of the Plan Year. These statements will show: balances remaining, payroll deposits, disbursements, and claims pending payment.
For daily inquiries about account balances, simply contact BSI Administrative Services, Inc. by Phone (973) 300-4274 (4BSI) or by E-Mail info@bsi-admin.com or by clicking here.
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What happens if I don't use all the money that I have set aside in the TFA Plan?
Balances are carried over into the next period.
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Can I transfer moneys between accounts?
No, you cannot move moneys between accounts.
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