In case you are not familiar with these IRS benefits, there are basically two types of commuter pre-tax uses: public transit (metrorail, bus, vanpools, etc) and parking. Each has an IRS-mandated monthly limit (currently at $230 for transit and $230 for parking), but you could use both benefits. This comes into play for someone who pays to park their car at a rail station. They use the parking benefit to pay to park and the transit benefit to ride the train.
In the past, all money on your SmarTrip card could be used to pay for transit fares or for parking fees. The IRS apparently wants these two uses to be split up. Starting in 2010 your SmarTrip card will be split into three "purses": transit, parking, and personal. This means you will have to tell your employer how much money to put into each purse, and value is not transferable among the purses. The personal value, however, can be used to pay for transit OR parking.
There are a few scenarios that metro has already explained. Say you have money on your card split into $2 transit and $10 personal, and your fare costs $3. $2 would come out of transit and the last dollar out of personal, leaving $9 remaining in personal. Or if you have $5 transit, $1 parking, and nothing in personal and you wanted to get out of the parking lot (which costs $4), you'd have to add $3 on to your card. Following?
Highlights of the new system:
- You will keep your same SmarTrip card.
- Leftover transit or parking value won't roll over each month. Instead it will be transferred back to your employer, and is up to the employer to handle this returned money. Personal value stays on your card. If your benefits are managed by a program like WageWorks, they are likely to return the value to your commuter account.
- It seems like the personal "purse" will act like the current SmarTrip, with the $300 limit and money not expiring each month, with the added use of filling in if you run out of transit or parking value.
- Your SmartBenefits will automatically be added to your card the first time you touch your card to a SmarTrip target (getting on the bus, getting through the metro gate, etc.) No more waiting in line at a machine each month and confusing the non-benefits users!
- It isn't clear if the "personal" portion will be pre-tax or not.
- It also isn't clear if everyone with a SmarTrip will see these different purses on their cards anytime they go to a farecard machine to add money. That may make SmarTrip cards confusing to the occasional user, or the tourist who must purchase one to get out of a parking lot.
- SmarTrip card limits used to be $300. They will now be $300 for personal, $230 for transit, and $230 for parking.
- Now that your SmarTrip card could be worth up to $760, make sure you register it!