Commuter Benefits

What is the commuter tax benefit?

As of January 1, 2012, the maximum transportation fringe benefit rates have been adjusted to $125/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 and we will inform them 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. PART supplies a certain amount of passes each month and the employer will sell passes to anyone who comes there to purchase. All you would need to do to get this started is determine where you will sell the passes and then read and sign the consignment agreement. PART would stay in touch every month to refill your passes and collect monies.
   
   
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, 2012, the qualified transportation fringe benefit (a.k.a. commuter tax benefit) is $125/month. This is the limit for pretax income to be used on Public Transportation. This would be set up similar to health insurance out of an employees pay check. Baptist Medical Center has done this through their Human Resources department and had great success.
   
   
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:
• It’s Easy for your company to order tax free transit checks from TranBen. First, determine how many checks you need to order per employee per benefit cycle. Vouchers can be ordered in any denomination. There is no minimum order or transaction fee. Complete TranBen’s easy to use order form. Make a payment to TranBen using Purchase Orders, Certified Check, Bank Check, Money Order or Bank Transfer. TranBen will ship 2nd Day Air via registered courier. To learn more about how you can provide pre-tax transportation vouchers to your employees, visit www.tranben.com or contact Kerry Francis, kerryf@tranben.com, (610)710-6695.

PART is here to help you get these benefits set up for your employees, please email brookek@partnc.org to get more information or if you have any questions!