I set up FSA accts for Dependent Care, Health Care How do I set up for Transit Commuter and Parking Commuter?None that I have tried shows it's pretax

We’ll walk you through how to set up pre-tax deductions for Transit Commuter and Parking Commuter benefits in QuickBooks Online (QBO), Pebbles135.

Setting up pre-tax commuter benefits in QBO requires a custom payroll item. QBO does not have a specific "Transit Commuter" or "Parking Commuter" deduction, so you'll need to create a pre-tax item. Here’s how:

1. Go to My apps and choose Payroll and then Employees.
2. Select an employee, then go to the Deductions & contributions section and click Start or Edit.
3. Tap + Add deduction/contribution.
4. In the Deduction/contribution type dropdown, pick an option that allows for a pre-tax setup. If you don’t see a commuter benefit type, choose a general pre-tax option such as Health Insurance.
5. In the Type dropdown, select a general pre-tax type.
6. For the Description, type a clear name like "Pre-tax Transit" or "Pre-tax Parking." This is what your employees will see on their pay stubs.
7. Select how the deduction is calculated (e.g., a flat amount per paycheck or a percentage of gross pay).
8. Choose the Pre-tax insurance premium option to ensure the deduction is taken out before taxes are calculated.
9. Press Save, then Done.

Keep in mind that the exact steps may vary slightly depending on your specific version of QBO Payroll. We also recommend consulting with a tax advisor or your accountant to ensure the setup is compliant with all federal, state, and local regulations, since these are pre-tax deductions that impact your payroll taxes.

After creating the custom payroll item, add the deduction to each employee’s profile. Let me guide you how:

1. Go to My apps, then choose Team and select Employees.
2. Choose and click an employee's name.
3. In the Deductions & contributions section, select the new "Pre-tax Transit" or "Pre-tax Parking" item you just created.
4. Enter the amount or percentage for the deduction for that specific employee. For example, if the employee wants to contribute the maximum semi-monthly amount, you would enter $125.00.
5. You can also set a limit in the Annual Max field if you want to ensure the contributions do not exceed the yearly maximum. As you correctly calculated, the annual maximum is $3,900 per year based on a monthly limit of $325.

If your company also contributes to the commuter benefit, you’ll need to set up a separate payroll item for the company contribution. This is also a pre-tax item and should be tracked separately from the employee's deduction. To learn more about managing your employees’ deduction items, check out this article: Set up, change, or delete employee-paid payroll deductions.

Revisit this post if you have additional questions about your employee-paid payroll deductions or QuickBooks-related concerns.