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Tax Sheltering of Parking Fees

It is the policy of the University of Kentucky that eligible participants may have the option of paying employee parking permit fees on a salary reduction basis (pre-tax), as provided by the Tax Payer Relief Act of 1997, Internal Revenue Code Section 132(f).

Only regular full-time or regular half-time employees are eligible to purchase parking permits through payroll deduction. Employees using the payroll deduction method may elect to pay their parking fees on a salary reduction basis (pre-tax). Employees who pay for permits by cash, check, or credit card (Visa/MasterCard/AMEX/Discover Card) are not eligible to receive the pre-tax deduction. Employees who are not eligible for the pre-tax deduction or who prefer not to participate will pay for parking permits on an after-tax basis.

The pre-tax deduction may reduce your social security earnings reported to the Federal Government. In most cases, there should be no effect on future social security benefits. If you have questions, please contact a tax professional.

An employee who pays for parking permit fees through payroll deduction and elects to have these fee deducted on a pre-tax basis must:

  1. Indicate their intention on the Parking Services web site "Employee Parking Permit Application" and submit their authorization and permit renewal online to Parking Services. After submitting your permit application online, you will be given the option to enroll in the pre-tax program; or,
  2. Indicate their intention by completing and signing a form, and returning it with their parking permit application card to Parking Services.

The pre-tax option must be selected each year when you apply for your permit.