The Commute-n-Save Program is a great cost-effective, value-added benefit. Provisions in the Internal Revenue Code allow your company greater flexibility in offering this benefit that works for you and your company. It works for business. It works for the economy. It works for the environment. Let it work for you.
Westchester’s Federal Commuter Choice Program Option
Commute-n-Save is Westchester’s name for the Federal Commuter Choice Pretax Transportation Benefit. The Commute-n-Save Program explains how employers can provide the federal pre-tax benefit to those employees currently using public transit, qualified vanpools or are paying for qualified parking. As of Jan. 1, 2014, if your company offers this fringe benefit, you are eligible to use up to $380 a month, or $4,560 a year, of your pre-tax income for transportation costs. Eligible costs include the costs for public transit buses, trains, ferries and qualified vanpooling. It also includes qualified parking costs incurred as part of your work commute.
Save money using this benefit
Currently under this qualified transportation fringe benefit the maximum tax-free benefit allowed for transit costs is $130 per month, or $1,560 per year. Those who have to drive to make a connection to public transportation or who park on or near a work location are eligible for the qualified parking portion of the benefit. The maximum tax-free benefit allowed for qualified parking is $250 per month, or $3,000 per year. Participating employers can save by lowering their FICA and Federal income tax costs. In many areas, employees will save by having their state and city income taxes reduced as well.
Ease and flexibility in offering the benefit
Provisions in the Internal Revenue Code for the qualified transportation fringe benefit make it easier for companies to offer public transportation benefits to their employees. This Federal transportation fringe benefit is exempt from the complex use restrictions common to cafeteria plans and flexible spending accounts (FSA). It is excluded from the cafeteria plans under section 132(f) of the Internal Revenue Code. Your company will not have to write a plan document or obtain IRS approval.
So there is less paperwork. There are no irrevocable elections or forms. This pre-tax fringe benefit can be started any time of the year and enrollment can be limited to certain times of the year.