Benefits, my ass.

August 9, 2013 10:09 AM

Is there ANY way I can cash in my "commuter benefits" debit card?

I just left a job at which one of the "benefits" was a (terrible, labyrinthine) commuter debit card program, that, in retrospect, I never should have opted into. "Dedicated" debit cards have been issued in my name, and can ONLY be used for transit expenses -- in this case, only for tickets on the Long Island Railroad. The money for these cards has already been deducted from my pretax income, the idea being that it makes purchasing the tickets slightly less expensive.

I possess one such debit card, with one more on the way -- holdovers from the money already deducted. Each card has about $250 on it. But I no longer live in the NYC metro area, no longer have that job, and no longer need to spend money on commuter rail. The thing is, though, that if I don't spend the money that has been loaded onto the card I have, the money cannot be used AT ALL. It will simply vanish, inaccessible to me. This seems unjust.

Do you know of any way that I can "extract" all or some of this money without actually spending it on LIRR tickets? This is around $500 that I could really use - and have, in a sense, already spent. I'd like it back!

I talked to the issuer of the card. I cannot get a refund. I cannot use it to buy other transit-related expenses (for instance, to buy gas for the car I now own). The card can ONLY be used for LIRR tickets.

I have considered buying LIRR tickets and then sending them back for a refund, but I have had major troubles with the LIRR website and cannot accomplish this seemingly simple task. (MTA's LIRR refund policy.) I'd lose a certain percentage of the money if I were to do this, which I am OK with. But buying and then refunding via mail does seem rather elaborate, though -- and, again, I can't even seem to do it. The website has been very uncooperative.

The benefits coordinator at my former employer is sympathetic but unable to help me.

Anything else I can do? I am not keen to throw away $500.

posted by Dr. Wu to Work & Money (34 answers total)

It's a workaround that you may not be comfortable with, but I wonder if any LIRR-using Mefite would be willing to have you buy tickets to their specification using the card, and then buy them from you at cost? You would get cash, they would get tickets, everyone wins.
posted by EmpressCallipygos at 10:12 AM on August 9, 2013 [3 favorites]

try selling them on Craigslist?

As long as you get value*(1-marginal tax rate) you've come out break even.

A lot of tax advantaged benefits work like this unfortunately - its sort of the quid pro quo to it.
posted by JPD at 10:13 AM on August 9, 2013 [2 favorites]

Sell them to someone who does use the LIRR for $450?
posted by brainmouse at 10:13 AM on August 9, 2013 [2 favorites]

Can you sell it to someone you know for 90% of value? If it's someone you know and trust they could pay you via paypal and you could mail the cards.
posted by cmfletcher at 10:14 AM on August 9, 2013

I had this EXACT same issue when I left my job working for NYC. I never found a good solution, ended up giving it to a family friend to use when he was in the city and unfortunately just wrote the money off as a loss.
posted by Captain_Science at 10:15 AM on August 9, 2013

You could always donate them to an area non-profit and get a donation receipt...
posted by spunweb at 10:20 AM on August 9, 2013 [2 favorites]

just sent you email to the address in your profile.
posted by cestmoi15 at 10:23 AM on August 9, 2013 [1 favorite]

You could always donate them to an area non-profit and get a donation receipt...

I'm not sure you can actually - as its non-taxable income. You would basically be deducting it twice from your gross income.
posted by JPD at 10:24 AM on August 9, 2013 [1 favorite]

eBay.
posted by kindall at 10:29 AM on August 9, 2013

Craigslist it or put it on one of those sites where people sell / exchange gift cards.
posted by WeekendJen at 10:37 AM on August 9, 2013

Response by poster: Thanks for the responses, everyone. The consensus seems to be to sell the thing(s) at a discount, which sounds sensible to me. (I thought about selling them to a former colleague, but couldn't make that work.)

I'd feel far more comfortable selling the card(s) to a MeFite than on Craigslist or eBay. I mean, if I were a prospective buyer of such a card on craigslist or eBay, I'd be mightily suspicious about such an item if it were posted for sale. I hope that I've garnered enough MeFi goodwill over the years to sell it to someone here without suspicion. :)

For whatever it's worth, this card has been issued with my name on it. Not sure if that makes a difference.

WeekendJen: what are some such sites? I don't know about them.
posted by Dr. Wu at 10:39 AM on August 9, 2013

I would be concerned that reselling tax-advantaged transit benefits could be regarded as tax fraud. I would also consider it likely that you won't be able to get a refund through official channels as transit agencies and the federal government are trying to make it harder to commit this kind of tax fraud.
posted by grouse at 10:53 AM on August 9, 2013 [3 favorites]

These aren't just "gift cards".

Selling these cards is the equivalent* of lying on your taxes. Some government agency is letting you forgo paying taxes on some of your income because you are being a good person and taking the train rather than driving. Your former place of business probably gets a benefit as well.

Well, if you sell the cards and buy hotdogs or something, you are effectively committing tax fraud. I wouldn't be surprised if selling these things falls under the same types of laws that cover selling "food stamps" cards for cash.

Obviously, not exactly a crime against humanity, but might not be the best idea of having evidence of this situation be in the hands of some random person you found on Craigslist.

I'd say unless you can buy the physical ticket and sell it someone you trust, it might be better to just write off the $500.

*At least in spirit, but probably in a legal sense as well.
posted by sideshow at 10:57 AM on August 9, 2013 [1 favorite]

Response by poster: Good points about tax fraud, grouse and sideshow. I honestly hadn't considered that. I will think about this some more. I may talk to my accountant, even.

I did just call the card issuer, and in fact the one card I possess has $490 on it. (I thought I'd get two cards at ~$250 each, but it's just the one at $490.)

Maybe it's best to just buy LIRR tickets and then refund them...

I'm eager to hear other points here. This is stickier than I thought.
posted by Dr. Wu at 11:00 AM on August 9, 2013

You probably do need to talk to an accountant: refunding them is realising your forgone income free from tax too. I can't see why you couldn't sell them and then pay taxes on the sale price, but that's why I'm not a tax advisor.
posted by cromagnon at 11:03 AM on August 9, 2013 [1 favorite]

Maybe it's best to just buy LIRR tickets and then refund them...

I think people are saying it's okay to buy the tickets, and then re-sell someone you trust the actual tickets - can someone knowledgeable speak to whether that would be okay? Especially if you sell them "at cost" (i.e., you buy $490 worth of tickets and you sell them for $490 rather than charging $500 for a "mark-up" or something)?

Selling the card outright I agree would be hinky, though.
posted by EmpressCallipygos at 11:10 AM on August 9, 2013

Can you use them to buy (for example) a monthly LIRR pass, and then sell the pass (Craig's List, eBay, MeFi) to someone who DOES take the LIRR?
posted by tckma at 11:10 AM on August 9, 2013

Getting the refund or doing anything beyond buying LIRR tickets and using them yourself is still commiting tax fraud. I'm still not a hundred percent convinced that you can. No matter how much money I have on my account, i can only buy one monthly pass. There are probably similar limits on your account.

It falls under the same idea as a FHA, it's use it for the intended purpose or lose it.

You can attempt to use these workarounds, but they all are contrary to the original purpose of the commuter benefit.
posted by politikitty at 11:21 AM on August 9, 2013 [1 favorite]

Unless a tax advisor says otherwise, I'm pretty sure that, if you get audited, you need to be able to show receipts for LIRR purchases (or MTA or whatever).

I'm not sure how likely an audit is or how serious a crime this would be, but it's a crime, and the people you'd be defrauding are other taxpayers.

You seem to feel entitled to the money as cash, which is understandable, but is not how pre-tax elections work.
posted by caek at 11:27 AM on August 9, 2013

I'd think it would be legal, in a tax sense, if you sold them and reported the proceeds as income. Just report it as income. (not a lawyer or a tax pro)
posted by amtho at 11:33 AM on August 9, 2013

Response by poster: I hear what you're saying, politikitty and caek, but isn't there a way in which my purchasing, then refunding, the tickets is an entirely legitimate use of this program? That is, I left my job, but my benefits continue through the end of this month (and the card itself is valid for 36 from date of issue). I left my job in part because my wife got a job elsewhere. OK, so, since I no longer live in the ONLY metropolitan area in which I the program allows me to use the card, shouldn't I be entitled to a refund?

I understand that I can't cash in the card, but this seems like a legit reason to at least get the value of the tickets refunded. I have paid my money into this program, but am completely unable to USE that program!
posted by Dr. Wu at 11:39 AM on August 9, 2013

no - programs like this don't always work like that, and even if they do you should only be entitled to a refund of the $500 after FICA and Income Taxes.

So purchasing and refunding is according to the letter of the law fraud. But they would never actually prosecute. If they caught you, they'd make you pay the taxes + a penalty.
posted by JPD at 11:42 AM on August 9, 2013 [2 favorites]

I understand that I can't cash in the card, but this seems like a legit reason to at least get the value of the tickets refunded.

What's the difference between these two statements? In the end of either scenario, you'd have cash in your pocket that you didn't pay income taxes on.
posted by hwyengr at 11:46 AM on August 9, 2013

Response by poster: no - programs like this don't always work like that, and even if they do you should only be entitled to a refund of the $500 after FICA and Income Taxes.

I would absolutely be content with a refund of the $490, less FICA and income tax. Is this legal? If it is, how do I get go about getting said refund?
posted by Dr. Wu at 11:49 AM on August 9, 2013

Response by poster: To be clear, I'm not trying to scam anything or anybody! I just want to find out if there's a way for me NOT to have to effectively throw away $500!
posted by Dr. Wu at 11:50 AM on August 9, 2013

I said "if". Most programs like this are not refundable. Its part of the quid-pro-quo that comes with the tax benefit. Flex spending is the same way.
posted by JPD at 11:50 AM on August 9, 2013 [1 favorite]

I'm neither lawyer nor tax accountant, but couldn't money from selling the card/tickets be reported as miscellaneous income for this year's taxes?
posted by teremala at 12:03 PM on August 9, 2013

Are you sure the cards are only good for the LIRR? When I worked in the city we had similar transit checks. They could be cashed in for NJ Path tickets, NJ transit tickets, LIRR, or metro cards.

I work in Phila now. I have a similar debit card. The work around I use is that this debit card can be used to refill my EZpass.
posted by remthewanderer at 12:25 PM on August 9, 2013

This is a pretty minor tax issue in the grand scheme of things, but another part of this is not only did you not pay taxes on that portion of your income that was directed to this benefit, but your employer also did not pay tax on that income paid to you. This is just how benefits work. From a tax perspective, this is sort of like trying to sell 3/4 of a month of health insurance coverage because you got a new job with benefits. It's just not going to happen in a clean way. But from your responses you obviously get that and you even said in your question that you now realize that you need to be more careful in how you allocate income toward these types of benefits.

So. Uhh, this is merely a philosophical opinion and certainly not my professional one, but I don't think it would be immoral to recoup your money as best you can and keep adequate records in case of an audit.
posted by stowaway at 12:29 PM on August 9, 2013 [1 favorite]

Are you sure the cards are only good for the LIRR? When I worked in the city we had similar transit checks. They could be cashed in for NJ Path tickets, NJ transit tickets, LIRR, or metro cards.

Good point. I'm looking at my benefits handbook right now, and it says I can use the benefits of my "Transit Reimbursement Program" for:

• Amtrak
• Long Island Railroad (LIRR)
• New Jersey Transit (NJT)
• Staten Island Rapid Transit (SIRT)
• Port Authority Trans-Hudson Corp. (PATH)
• Metro North Commuter Railroad
• Commuter and suburban express bus services
• Certain ferry and registered van pool services
• New York City Transit Authority buses and subways

but not for

• Airfare
• Taxi and limo services
• Amounts that exceed the monthly limit
• Transit expenses of your family members
• Bridge, tunnel, and highway tolls, including E-Z Pass

I can't promise you the same restrictions apply to your program, but you could check with your benefits officer, and if you're still in the New York area, maybe that helps?
posted by caek at 1:46 PM on August 9, 2013

I had a similar payroll deduction thing when I worked in Boston. I paid for my MBTA Commuter Rail pass through payroll deduction, a little less than half the cost before tax and the rest after taxes. I think that's because there was a maximum pre-tax payroll deduction and the cost of the pass (because I lived in Worcester County) was much more than that max. The difference between my former employer's program and yours was that the monthly rail passes were sent to my employer, who would give out the passes every month. So there was no debit card involved.

I suppose there was nothing to stop me from selling the monthly passes, but I actually used the train to get to work, and once I gave my two weeks' notice, I didn't get a monthly pass for the next month.

There was also a car insurance discount in Massachusetts -- you got a certain percentage off your car insurance if you turned in a years' worth of Commuter Rail or T passes to your insurance company. The problem was once I quit that job (which I'd only worked at for a year), I moved to Virginia, so I wasn't ever able to take advantage of that discount.
posted by tckma at 2:27 PM on August 9, 2013

Have you talked to your former employer? Is there any way you can turn these cards back in to them, and have them issue you a check, complete with taxes deducted? I mean, I'm sure they don't want to, it would be a p.i.t.a. for the payroll department, but Im not sure that means it's an automatic no.
posted by vignettist at 4:47 PM on August 9, 2013 [1 favorite]

We used to solve this at my old job by selling extra Transit Checks to our coworkers at a couple of bucks under face value (to acknowledge that we had bought them pre-tax.) Do you have any former coworkers who could use your allotment? At least that way the tax benefits are staying pretty close to the original intent.
posted by desuetude at 10:10 PM on August 9, 2013

Check with the company that issues the cards. I used a similar scheme in Australia, and the policy was that when you left your job, you had a month to spend the money on the card. After that time, any remaining balance would be returned to your former employer, taxed, and then paid to you as final wages. I know the system is likely quite different in the US, but it's worth checking whether this is an option for you.
posted by embrangled at 6:00 PM on August 10, 2013