Federal Transportation Incentives

How do you get more money in your pocket without working any harder?  Does this sound like some sort of scheme?  Well, it’s not.  It’s called the Commuter Tax Benefits and under federal law, employers can save on payroll related taxes and employees save on federal income taxes. 

How does it work?  Beginning on January  1, 2012, employers may provide workers with up to $125 per month in tax-free transit and vanpool benefits.  Prior to 2012, the benefit was $230 per month.  The monthly limitation under federal law for vanpools and transit passes is $125.  But, there are more benefits.

The monthly limitation regarding the fringe benefit exclusion amount for qualified parking is $240!  Commuters can receive both transit and parking benefits (up to $365 per month).  Employers can allow employees to use pre-tax dollars to pay for transit passes, vanpool fares and parking.

FOR EMPLOYERS:

Transit

Employers can give their employees up to $125/month to commute via transit.  The employer gets a tax deduction and saves over providing same value in gross income.  Alternatively, Employers allow employees to use pre-tax income to pay for transit and employers save on payroll tax (at least 7.65% savings) or a combination of both up to statutory limits of $125/month.

Vanpool

Employers give their employees up to $125/month to commute in a vanpool.  The employer gets a tax deduction and saves over providing same amount in gross income.  Alternatively, Employers can allow employees to use pre-tax income to pay for vanpooling and employers save on payroll tax (at least 7.65% savings) or a combination of both up to statutory limits of $125 per month.

Parking

Employers give their employees up to $240/month for qualified parking.  The employer gets a tax deduction and saves over providing same value in gross income.  The parking must be at or near the employer’s worksite, or at a facility from which the employee commutes by transit, vanpool or carpool.  Alternatively, employers allow employees to use pre-tax income to pay for qualified parking and employers save on payroll tax (at least 7.65% savings) or a combination of both up to statutory limits $240/month.  Remember that these benefits can be used together for a total savings of $365/month.

FOR EMPLOYEES:

Transit

Employee receives up to $125/month tax free for transit or vanpool (this value will not appear on their W-2 form) or Employee pays for commute benefit with the pre-tax income and saves on income tax or a combination of both.

Vanpool

Employee receives up to $125/month tax free (not on their W-2 form) or Employee pays for commute benefit with the pre-tax income and saves on income tax or a combination of both.

Parking

Employee receives up to $240/month tax free (not on their W-2 form) for qualified parking or Employee pays for commute benefit with the pre-tax income and saves on income tax or A combination of both.

GETTING STARTED:

If you’re interested in saving money for your business and your employees on SunRail, please call our Business Development Team at 407-487-4035 or let the Florida Department of Transportation help you through www.reThinkYourCommute.com or call 1-866-610-RIDE (7453).