DC’s Parking Cashout Law Goes Into Effect 1/15/23

Harmony Clients & Friends,

Back in 2020, DC passed the DC Transportation Benefits Equity Amendment Act of 2020, better known as the DC Parking Cashout Law. It applies to businesses located in DC with 20+ employees that lease parking lots/spaces and offer parking benefits to employees (broadly, free parking or other subsidized parking benefits). Reporting requirements begin 1/15/23.

The long and short of this act is that DC aims to reduce the number of employees who commute into the city via private vehicle by putting the onus on DC businesses to replace employee parking benefits with one of several benefit options outlined by the city (payment for alternative commuting methods like train or bus, or health coverage, or cash equal to or greater than the value of the parking benefit), or paying a $100 fee per employee with a parking benefit.

Reporting and compliance guidelines are somewhat complicated and will apply differently to everyone, so Harmony is unable to offer one-size-fits-all guidance. DC’s very broad official advice is: "By discontinuing free or subsidized parking, you remove the criteria that requires you to comply with the law. Out of all the options, removing parking benefits is the quickest and most cost-effective way of complying with the law."

You can read more on DC’s infographic, or on their lengthy FAQ. GoDCgo’s full page offers further information and templates.

TLDR: Beginning 1/15/23, your business may need to replace its parking benefits with some other benefit, or pay a monthly fee to the city.  While Harmony is unable to prepare and file parking cashout reports on behalf of clients, we are happy to work with you to identify replacement options that line up with the DC guidance. Reach out to your Harmony accountant if you need guidance on your business’s best option.