Here are some common questions about Alice
What is Alice?
What is pre-tax spending?
How much can my employees save?
How do employers save money?
Can you explain the math using a real-world example?
Using two examples, let’s see what this will mean for you and your employees:
Example 1 – Sarah:
- Sarah commutes via the train, spending $121 on a 30-day transit card. That works out to $4.03 per day which is $1,472.17 per year
- Sarah’s marginal tax rate is 35%. By paying for transit with her debit card that she connected to Alice, she will save 35% of the $1,472.17 she spends to ride the train.
- Pre-tax spending with Alice puts $512.40 back into her take home pay each year.
Sarah’s employer’s savings:
Sarah’s employer doesn’t have to pay the employer’s share of payroll taxes on the $1,472.17 she spent pre-tax. This results in a savings of $117.12 for the business.
Example 2 – Jordan
- Jordan drives to work and pays $250 to park at the garage and parking meters near his office each month.
- Jordan pays for parking with his is credit card he connected to Alice, spending $3,000 pre-tax a year.
- His marginal tax rate (federal, state, local, social security, and Medicare) is 40%. Jordan’s take home pay will go up by $1,200 a year.
Jordan’s employer’s savings:
Jordan’s employer doesn’t pay the employer’s share of payroll taxes on the $3,000 he spends on parking pre-tax, which is $240 in annual tax savings for the business.
Talk about a win win! Now, imagine if you had 1,000 Sarahs and Jordans.
How does Alice automatically detect eligible transactions?
It’s simple! Your employees connect one or more of their preferred credit, debit, or prepaid cards to Alice. Our technology automatically identifies eligible pre-tax purchases. Eligible transactions are verified via txt message and once confirmed, they are categorized and processed for a reimbursement. All of the math, forms, and compliance is handled by Alice on the backend.
To make it even easier for employers, Alice synchronizes with your the company’s payroll system so that the required pre-tax deductions are set automatically. In addition, by connecting to your company’s payroll system, tax reimbursements can distributed automatically without any work from HR staff, business owners, or accountants.
Where are the employee savings coming from?
Using Sarah as an example, let’s take a look at where the money she will get back comes from:
- As your employee, Sarah earns $1,000 per week in gross pay.
- Your payroll service is withholding approximately 35%, or $350, from each paycheck for social security, medicare, federal, state, and local taxes.
- When Sarah spends $121 pre-tax on her monthly transit card, Alice provides your payroll service with the information they need to deduct that from her gross pay.
As a result, her 35% marginal withholding rate is applied to $879 ($1000 – $121). That means the payroll service withholds $307.65 instead of $350.
Alice puts the $121 back into her net pay and because she paid less in withholding, she got to keep an extra $42.35 of her paycheck!
Your payroll service is already able to take information on pre-tax deductions from Alice. Where Alice comes into the picture is automating everything so employees and employers don’t have to do any work.
I am busy, how much time does Alice take to manage?
This is a great question! Managing Alice is as simple as:
Step 1: Setup – Once you have signed into your account there is little else that you need to do. Add your billing information, invite your employees, and choose whether you want Alice to automate payroll deductions which we do at no charge to you.
Step 2: Enroll Employees – We’ll send you text to email your employees and take it from there, using email and text message to get your team started. Connecting the card(s) they use to Alice takes 10 minutes or less.!
Step 3: On-Going Employee Support – If an employee has any question relating to Alice, their savings, or simply want to know what it would mean if they were to change how they get to and from work – we’re here to help! Busy employees can text, email, or call us.
How does Alice make money?
What guarantee do I have that our data is secure with Alice?
How do I enroll in Alice?
- Visit https://thisisalice.com/enroll
- Enter your employer’s passcode
- Finish setting up your account and link your preferred debit or credit card
- Spend as normal using the card you’ve connected
- When Alice discovers a pre-tax eligible purchase, we’ll send you a confirmation txt
- Upon confirming, you’ll see additional funds added to your next paycheck
How does Alice help me?
How much can I save per year with Alice?
What commuting related expenses are pre-tax eligible?
You can buy almost anything you use to get you to and from work regularly:
- Train, light rail, subway, metro, and bus passes
- Access-A-Ride (AAR)
What childcare related expenses are pre-tax eligible?
These are the most common eligible dependent-care expenses:
- After school programs
- Au Pairs
- Work-related Babysitting
- Babysitting by a relative who is not a tax dependent (if work-related)
- Before and after school programs
- Extended care – (supervised program before or after school hours)
- Housekeeper who cares for child (only portion of payment attributable to work-related child care)
- Nursery school
- Payroll taxes related to eligible care
- Registration fees (required for eligible care, after actual service received)
- Sick child care
- Summer day camp
- Transportation to and from eligible care (provided by care provider)
Some expenses people ask about that are not eligible:
- Activity fees
- Not work-related Babysitting
- Babysitting by a tax dependent (no matter if work-related or not)
- Dance Lessons
- Educational, learning or study skills services
- Field Trips
- Housekeeper, maid, cook, etc
- Kindergarten tuition
- Language classes or Piano lessons
- Late payment fees for services
- Meals, snacks, of food
- Medical care
- Private School Tuition (kindergarten and up)
- Registration fees (required for eligible care, before actual service received)
- School Tuition
- Transportation to and from eligible care (not provided by care provider)
What healthcare related expenses are pre-tax eligible?
These are some of the most common eligible healthcare expenses:
- Alcohol and drug addiction treatment
- Breast reconstruction surgery
- Dental treatment
- Diagnostic tests and devices
- Doctor’s visits
- Eyeglasses, contact lenses, and exams
- Fertility enhancements
- Hearing aids and batteries
- Operations/surgery (non-cosmetic)
- Nursing services
- Physical therapy
- Psychiatric care
- Smoking cessation
Some expenses people ask about that are not eligible:
- Cosmetic surgery
- Diaper service
- Electrolysis or hair removal
- Funeral expenses
- Health club dues
- Illegal operations and treatments
- Maternity clothes
- Nutritional supplements
- Over-the-counter medicines for which you do not have a doctor’s prescription
- Toiletries (e.g. toothbrush, toothpaste)
- Teeth whitening
- Weight loss programs (unless prescribed to treat a specific disease)
I drive to work, is gas and car maintenance a pre-tax eligible expense?
What is the maximum I can spend pre-tax each month commuting to work?
You can spend a maximum of $260 a month on transit used for commuting plus $260 a month on parking related to commuting and $260 on ride-sharing
Do I need a special transit pass?
I use multiple debit and credit cards, can I connect just one to Alice?
How does Alice work to save me money?
How do I know if I make enough money for pre-tax spending to make a difference for me?
Pre-tax spending will increase your take home. Let’s use an example:
- Jada earns $15/hour at the restaurant where she works in New York City. 32% of what she earns comes out of her paycheck for Social Security, Medicare, Federal, State, and Local taxes.
- She buys the $32 7-day Metrocard each week to commute to work spending which is $1,664 per year.
- When she connects her debit card to Alice, she’s now spending pre-tax on commuting and that puts 32% (her marginal tax rate) of $32 (cost of her weekly commuting) back into her take-home pay.
- That’s $10.24 per week which is $532.48 more she gets to keep per year. Using Alice is like Jada getting a 40 cent an hour raise that her employer didn’t have to pay for!
- Can I buy my transit pass from my neighborhood grocery store or with cash?
No, IRS rules require that pre-tax eligible expenses be made directly from the mass transit provider, mass transit provider apps, or parking facilities, meters or their app. This means that buying your transit pass from a reseller, like your local grocery store, will not be approved for pre-tax spending.
Is my card information secure with Alice?
What happens if I have a problem with buying or using my transit pass?
How do I add another credit or debit card?
Sign into your account here: https://app.thisisalice.com/login
On the left-hand side of your dashboard, you’ll see an option to “add a new card.” Click on the button and then enter your info.
You’ll also be able to see all the cards that are already linked to your account.
How do I reset my password?
To recover your password, click “login” then “forgot your password?” prompt at bottom of screen.
Enter your email address and we’ll email you a link to reset your password.
I just spent $20 on a transit pass. Did you see that yet?
I purchased something I believe is pre-tax eligible and I don’t see it in my account. What do I do?
What about business trips, are they pre-tax eligible expenses?
This is a two-part answer:
- If it’s a one time trip you can’t count it for commuting. That may be a reimbursable travel expense and you should ask your employer for more information about their reimbursement policy for business travel.
- If your employer is paying for your trip or reimbursing you for the expense, you can’t also use pre-tax spending.
What about purchases I made before I enrolled in Alice?
Still need help? Send us a note, we’re here to help!
For any other questions, please email us at firstname.lastname@example.org or text us
Interested in Alice?
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