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
Tax-free commuter benefits, also known as qualified transportation fringes, are employer provided voluntary benefit programs that allow employees to reduce their monthly commuting expenses for transit, vanpooling, bicycling and work-related parking costs.
As of Jan. 1, 2023, if your company offers this fringe benefit, you are eligible to use up to $300 a month of your pre-tax income for transportation costs. Your company can offer commuter benefits in the form of tax-free employer-paid subsidies, pre-tax employee-paid payroll deductions, or a combination of both.
Save Money with Pre-Tax Commuter Benefits
The employee’s taxable income is lowered, since commuting costs are deducted from their income using pre-tax paycheck dollars. The company’s payroll taxes are also lowered by the total amount that all employees contribute pre-tax, because that amount is no longer categorized as taxable payroll dollars (wages or salary) for your business.
What Pre-Tax Commuter Benefits Can Be Used for
Commuter, transit or transportation benefits are a way for employers to let employees use pre-tax dollars for their work-related transportation expenses, such as:
- Transit passes: bus, train, subway, ferry
- Parking fees
- Vanpooling
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 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 at any time of the year. The Smart Commute team will guide you through the process and offers free educational tabling events to explain pre-tax commuter benefits to your employees.
Call (914) 995-4444 for details or contact us at .