Benefits Program

Commuter Benefits

Transit and Vanpool benefits are Commuter Benefits offered by employers to employees to help them commute to work using transit or vanpools. In most cases, the employer purchases a transit/vanpool pass or voucher from a local transit operator or voucher provider.

Federal tax code allows employers to offer up to $230 per month ($2,760 per year) in transit and vanpool benefits tax free. According to the IRS Code Sec. 132(f), qualified transportation fringe benefits are excludable from income for purposes of taxation. These benefits include transit passes, vanpool expenses and qualified parking. (Parking will be discussed more fully in the next section). An employer is not limited to providing a transit or vanpool of $230 per month, however, any excess value must be included in the employee’s gross income for income and employment tax purposes.

The scope of the tax-free Commuter Benefits was expanded greatly in 1998 with the passage of the Transportation Equity Act for the 21st Century. This act amended Section 132(f) of the Internal Revenue Code as it relates to employer provided commute options. Qualified transportation fringe benefits may be offered by employers through Employer-Paid Programs, Pre-Tax Benefits, or Cost-Sharing.

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Employer-Paid Program

In this setup, the employees receive transit or vanpool benefits completely free of all U.S. payroll and federal income taxes, up to $230 per month. The employer pays the full cost of the benefit and gets a deduction from its federal business income taxes for the value of the benefit.This option is one of the most appealing to employees and has the potential to decrease single-occupant vehicle driving. Therefore, it has the most impact on alleviating congestion and improving air quality and is a primary option in the Working For Clean Air program.

Pre-Tax Benefit

Under this program, employees may have up to $230 taken out of their current monthly pay before taxes are applied in order to pay for the cost of commuting by transit or vanpools. Employees would not pay federal income taxes or payroll taxes on the amount they set aside. Employers also would not pay U.S. payroll taxes or related payroll costs on the amount. This program costs the employer practically nothing except the costs associated with the administration of the benefit and saves them tax dollars. It also saves the employee tax dollars.

Cost-Sharing

Under this option, employers may share the cost of commuting to and from work with employees, combining the two methods above. For example, the employer may offer $30 per month in benefits and allow the employee to set aside the other $200 as a pre-tax benefit (for a total of $230).

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Enjoy commuter benefits as a T passenger.

Advantages of the Commuter Benefits Program

Cost Savings

Employer-Paid Programs: If the employer chooses to pay for the benefit, then the value of the benefit can be deducted from their corporate income taxes and is free of employer payroll taxes.  As a result, the money spent on the benefit is greatly reduced by the tax savings.

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Employee Satisfaction

Commute programs create big wins for a company from a morale and productivity point of view. Employees view these programs favorably, which in turn increases appreciation for the employer and increases commitment and productivity. From a recruitment and retention standpoint, programs like these make employers more desirable.

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Ease of Administration

A positive feature of these benefits is the ease of administration. This is not a cafeteria or flexible spending plan and is not governed by the stringent requirements of Section 125. This program has no complicated forms or plan filing requirements, no use-it-or-lose-it rules, no irrevocable elections and no mandatory enrollment dates. Non-discrimination rules do not apply to these benefits and they are not subject to Form 5500 annual reporting. Employers can use payroll deduction procedures similar to those used for other pre-tax programs.

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Cost of Program

The primary cost of employer-based transit/vanpool benefits is the employer contribution to the employee’s transit or vanpool expenses. Although providing this benefit costs a company less than providing taxable salary, the cash flow needed to purchase passes or vouchers may be an issue for some companies.

Contact Betty Battles at 817.215.8660 for additional information.

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TransiCheck

Want to provide a valuable tax-free employee benefit?
You can, with TransiChecks from The T.

Through this outstanding program, your employees will save money on monthly transit passes or vanpool fares, and you'll get a tax-free benefit, up to $230 per month, per employee. Take a few moments to find out more about the TransiCheck program from The T. Then, call 817.336.RIDE to enroll your company in this excellent employee benefit program.

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How much of the amount is tax-deductible?

Any amount up to $230 a month per employee could be eligible for a corporate income tax deduction.

How do my employees benefit?

Employees not only save money on transportation costs, they also save on gas, parking, maintenance, and may benefit from a decrease in auto insurance.

How does my company get the TransiChecks?

Once an employer signs a letter of agreement, The T will provide a batch of Transi-Checks to your company on a consignment basis. Then, The T's Employee Trip Reduction Coordinator will mail additional TransiChecks as needed. Employees must redeem TransiChecks within 90 days of receiving them.

How do I pay for the TransiChecks?

Employers pay only for the TransiChecks that employees redeem. Each month, all redeemed TransiChecks used by employees at your company will be invoiced to you.

How do employees redeem the TransiChecks?

It's easy. They simply mail the Transi-Check Voucher form, along with a check or money order, to The T by the 9th of each month. They can also pay at The T's Customer Service Department at 1001 Jones Street (Intermodal Transportation Center). Only one Transi-Check may be redeemed per employee, per month.

What about employees who use vanpools?

Vanpool passengers are issued TransiCheck by their employers, with an amount designated at the employer's discretion. When the van driver collects van fares, the van passenger gives the driver the TransiCheck, plus the amount of the difference for the monthly fare.

Are there any limitations on TransiChecks?

Yes. They may not be used toward the purchase of a senior citizen pass, disable pass, or for MITS (Mobility Impaired Transit Service).

How do I get started?

Call The T at 817.336.RIDE to contact an Employee Trip Reduction Coordinator.

What if my employer chooses not to subscribe?

Employee pays for commute benefit with pre-tax dollars and saves on income tax.

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