Commuter Benefits

Use your Pre-tax Income to pay for Public Transportation!

The 2009 Emergency Economic Recovery Act was signed by President Obama which increased the limit for pre tax income to be used on Public Transportation. The limit has increased from $120 to $230 for working Americans who commute by transit and vanpool. This provides a significant tax savings, up to $1,000 or more a year.  That means if you commute to work via public transportation or vanpool your employer may allow you to set aside $230 pretax dollars from your gross income to pay for mass transit!  Companies who provide this benefit can also save up to an additional $100 per employee per year in payroll taxes.

You may ask yourself “What qualifies as a transit expense?” The answer to that question would be a PART monthly pass, PART Ticket book, 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.

Previously, employers were allowed under Section 132(f) of the Internal Revenue Service (IRS) Code to let their employees use up to $120 per month of their pre-tax income to pay for their transit or vanpool commuting expenses and up to $230 per month for commuter parking. The new legislation amends the IRS Code to set the monthly tax-free contribution limit for transit/vanpool to a maximum of $230 per month.

Who is doing this already? Companies such as GMAC Insurance, Wake Forest Health Sciences 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 and we will inform them of the added benefits that they could give to all employees!

* Source http://www.nctr.usf.edu/clearinghouse/commutebenefits.htm