Commuter Choice refers to provisions in the Internal Revenue Code [(26USC 132(f)] that permit employers to offer tax-free benefits to employees who commute to work by methods other than driving alone.
This benefit can be realized by an employer providing the following Metro Ride fare options to its employees:
- Adult Bus Pass - $38 per month - good for unlimited rides during the calendar month.
- Senior/Disabled Bus Pass - $19 per month - good for unlimited rides during the calendar month.
- Bus Tokens - 10 for $10 - go for 10 one-way rides.
Employer Paid Benefits - Employers can pay up to $250 per month for their employees to commute by transit. With this arrangement, employees receive up to $250 monthly in tax-free transit benefit and the empoyer gets a tax deduction for the expense. Employers have found that providing transit benefits offers significant savings over offering the equivalent dollar value to employees in the form of salary increases.
Employee Paid Benefits - Employers can allow employees to elect to exchange up to $250 per month in taxable salary for a tax-free transit benefit. Employers save money too, since the amount of the employee's salary exchnged to transit benefits is not subject to income tax (up to the $250 maximum).
Shared Cost Benefits - Employers can provide a portion of the cost of taking transit as a tax-free transit benefit.
To Obtain Additional Information
- The pertinent law of the Internal Revenue Service (www.irs.ustreas.gov) can be found in Section 132 in the Internal Revenue Code, Tile 26 of the U.S. Code.
- For more information on obtaining Metro Ride passes and tokens, e-mail Metro Ride at firstname.lastname@example.org.