HR: Benefits: Trust Employees
Pre-Tax Parking at CfA Parking Lots

SAO Federal and Trust Fund employees who are registered as "annual parkers" at CfA parking lots can elect to take advantage of pre-tax savings on their biweekly parking expense. The pre-tax benefit for SAO annual parkers, if elected, will reduce the taxable gross income for federal, state and FICA taxes each pay period, subject to IRS limitations. Personal factors related to tax and FICA status, as well as the employee's total parking expenditure, will determine the tax savings.

Below is an example of the tax savings for the 2013-2014 parking year beginning July 1, 2013 through June 30, 2014 with a biweekly payroll deduction of $61.39, assuming that the employee is in a 28% federal tax bracket and the state income tax rate is 5.3%. FICA tax is comprised of 6.2% OASDI (Social Security) tax and 1.45% HITS (Medicare) taxes.

Annual parking expense without pre-tax:

Federal tax annual savings (28%):446.88
FICA (FERS) annual savings (7.65%):122.09
State tax annual savings (5.3%): 84.59
Total Annual Savings:$653.56

Please note that due to IRS restrictions, those employees who park at CfA lots on an intermittent basis are not eligible for this pre-tax parking benefit.

Employees who park in CfA lots will not be required to provide parking receipts, but must submit a change of election if annual parking status is discontinued. It is incumbent upon the employee to notify SAO Human Resources without delay to avoid the implications of tax fraud.

A new election form must be completed for each new parking year. It is likely that the payroll deduction expense will change at that time, as well.

The pre-tax treatment of SAO parking deductions will begin with the first pay period in the month following registration with the SAO Human Resources Department, provided SAO HR receives your completed election form at least two weeks prior to the month in which parking deductions will occur. Click here for a Pre-tax Election for SAO Annual Parkers form.

Should you have questions about this plan, please contact SAO Benefits Office at (617) 495-7371.


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