The ability to pre-tax qualified transportation expenses (QTE) is now available to all eligible employees under Section 132(f) of the Internal Revenue Code. The 1997 Balanced Budget Act effectively stated that qualified transportation expenses effective January 1, 1998 will no longer be taxed.

This section of the code provides the employer with a means to enhance their benefit offering at no additional cost. This "Parking Flex" account is yet another safe harbor from constructive receipt, like a Section 125 plan. However, it is not does not fall under Section 125 of the Code.

The simplicity and flexibility of this employer adopted benefit is significant:

1. This provision is not part of Section 125 so there is
no need to complete a yearly 5500;

2. A plan document is not required;

3. The plan does not require an irrevocable election which
means the employee is permitted to make, unmake and
revise their elections during a plan year;

4. The employer and the employee can exclude this
reimbursement from wages for FICA purposes; and

5. FLORES can administer this plan using our
state-of-the-art flex technology.

"Parking Flex" - What Is Allowable?

Specifically, expenses including Qualified Parking, Vanpooling and Transit Passes can be reimbursed from this account. The definition of these items is as follows:

• Parking - On or near business premises up to $230.00 per month (effective 1/1/2010)
• Vanpooling - To and from work; must use commuter highway vehicle capable of seating 6 or more adults (not including driver); 80% of usage must be to transport employee to and from work. Expenses up to $230.00 per month are allowable (effective 1/1/2010).
• Transit Passes - A pass, token, farecard, voucher or similar item that entitles the employee to transportation, provided that such transportation is on mass transit. Expenses up to $230.00 per month are allowable (effective 1/1/2010).
• Substantiation of an Expense - must include information submitted by the payer sufficient to enable the payer to identify the specific nature of each expense and ensure that the expense can be attributed to business.

QTE Process:

1. Flores introduces program

2. Flores generates proposal

3. Client accepts proposal

4. Client establishes Policy for reimbursement procedures

5. Employees educated on program

6. Employees make election

7. Client enters reduction information into payroll system

8. Client generates deduction report/file each pay period

9. Flores validates deductions against database

10. Client confirms corrections

11. Client or Flores authorizes direct debit