What is the commuter tax benefit?
As of January 1, 2016, the maximum transportation fringe benefit rates have been adjusted to $255/month for transit. Transportation fringe benefits are used for the purchase of transit fare passes, and vanpool fare expenses.
Tax-free commuter benefits can be structured as an employee-funded tax-free payroll deduction; as an employer-funded benefit; or the costs can be shared by employer and employee. The benefit can be delivered in the form of transit provider-specific passes, universally accepted vouchers and terminal-restricted debit cards, or through a reimbursement model under specific conditions defined by the IRS.
Qualified transportation fringe benefits (Section 132(f) of the Internal Revenue Code) or “Commuter Tax Benefits” are like money in the bank. Employers save on payroll related taxes. Employees save on federal income taxes.
Who is doing this already? Companies such as GMAC Insurance, Wake Forest Baptist Medical Center and Branch Banking and Trust (BB&T), just to name a few.
Talk to your employer about treating bus passes or vanpool fare as a pre-tax benefit or have your employer contact PART to find out of the added benefits that they could give to all employees!
As an employer, how can I provide commuter benefits for my employees?
There are a few options when it comes to selling PART passes as a commuter benefit for your employees. You can do a combination of 1 and 2 or 1 and 3.
1. First option would be selling them at the employment location as a consignor.
2. The second option you can make available as a benefit to your employees is by selling passes through pre-tax payroll deduction. As of January 1st, 2016, the qualified transportation fringe benefit (a.k.a. commuter tax benefit) is $255/month.
3. Third option would be to use an outside vendor to supply transportation expense vouchers to employees. Here is some information about one of those vendors visit www.tranben.com.
Click here to get more information or if you have any questions!