2020 contribution limit:
Transit/Vanpooling pre-tax monthly limit: $270
Qualified Parking pre-tax monthly limit: $270
The purpose of this pre-tax employee benefits account is to reimburse employees for eligible transit and parking expenses, up to the IRS statutory limit.
Since 1985, employers have been permitted to give the following transportation fringe benefits to employees on a tax-free basis:
transportation in a commuter highway vehicle if such transportation is in connection with travel between the employee’s residence and place of employment (also known as “van-pooling” like Uber or Lyft).
Under general principles of taxation, all fringe benefits provided to an employee by his or her employer (including transportation plans) are taxable to the employee unless the Code provides a specific exclusion for the benefit. For most transportation fringe benefits, the maximum amount that employees can exclude from income is subject to a statutory limit that is periodically adjusted for inflation.
Specific regulations by the IRS on Commuter Benefits can be found at https://www.law.cornell.edu/cfr/text/26/1.132-9. One of these regulations indicates that all claims must be made within 180 days of incurred expenses.