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Kiosk & Vendor Validation Settings

Commuter benefits are regulated by the IRS to ensure that the pre-tax dollars are being used on qualified transit expenses*. Some transit vendors—while conveniently located at public transit stations—may sell other miscellaneous items like newspapers, coffee, parking passes, etc. As a result, if your team uses their commuter benefits cards at one of these vendors, they may be spending pre-tax dollars on unqualified expenses.  

There are two settings for how to manage these expenses, which will default to Self-Managed upon setup. If you'd like to change this setting to Managed, contact our team.

Option 1:  Self-Managed

Your team will be able to use their cards at unapproved transit vendors, which could be non-compliant. If the company is audited by the IRS and found in violation, the company and employee(s) may be responsible for paying tax penalties. If an IRS audit does occur, receipts will be required as proof of eligible transit expenses—make sure you or your team keep them if needed down the line. Ultimately, if your team uses their cards compliantly, this is the more convenient option.

Option 2: Managed

We’ll validate the vendors to make sure they’re compliant and approve or deny your team’s transactions when they use their cards. Any kiosks or vendors that sell unqualified products as defined by the IRS will be rejected (this is very common at local commuter stations). This means that your team may be denied expenses and will need to submit claims for reimbursements to use their commuter benefits. While this option is less convenient, it’s more compliant and reduces the risk of penalties.

If you'd like to change your settings, sign into your account and reach out to our team.

*Specifically reference question 16

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