When setting up a pre-tax payroll deduction program for Commuter Check's Section 132(f) program, the following information may be helpful to you when you speak with your payroll provider.

The transit benefit program is authorized under Internal Revenue Code Section 132(f). Commuter Checks fully conform to that Section. The Commuter Check program is treated like other pre-tax payroll deduction programs, such as for Section 125 or 401(k) contributions. An important difference from other pre-tax benefit programs, however, is that the use of Commuter Checks does not have any of the restrictions or reporting requirements of Section 125 and Section 401(k) plans.

Most nationwide payroll providers are familiar with the set-up of Section 132(f) programs. If your payroll provider customer service representative is unfamiliar with this, please ask to speak with his or her supervisor, or call us at (800) 531-2828. We would be happy to assist you in arrangements with your payroll provider.

When setting up your Commuter Check program, you will need to determine the following information and convey it to your payroll provider:

Deduction cycle: You, as an employer, choose when Section 132 (f) deductions are made. We have found that employers generally choose weekly, bi-monthly, or monthly deductions. The frequency that you deduct funds from your employees' payroll need not match your payroll periods or the frequency that you submit orders to us.

Enrollment period: Employers are not required to have a specific enrollment period for Commuter Checks. You can choose to effect enrollment (or change existing enrollment) for your employees at any time of your choosing.

Identification of employees and deductions: Once you receive the completed enrollment forms from your employees, you will need to convey to the payroll provider the names of the employees enrolled and the amount and times of each employee's deductions for Commuter Checks.

Unlike other pre-tax benefit plans, you do not have to concern yourself with the following:

Use-it-or-lose-it stipulations: There are no use-it-or-lose-it stipulations with Commuter Check. Other pre-tax benefits may require employees to spend the entire amount of their deduction by the end of each year. If the employee does not, the money set aside is forfeited. Since Commuter Checks are given to employees during the same period that deductions are made, this issue does not arise. Because Commuter Checks are valid for 13 months from the time they are issued, employees always have sufficient time to use them.

IRS reporting requirements: The Commuter Check program, pursuant to Section 132(f), does not require the creation or submittal of plan documents or filing of reports such as a Form 5500 or similar documentation.