Commuter Tax Benefits for Businesses
Learn how encouraging your employees to use Foothill Transit can earn you tax benefits for your business.
Commuter Tax Benefits – or “qualified transportation fringe benefits” according to Section 132(f) of the Internal Revenue Code – are like money in the bank. Companies may provide workers with up to $240 per month in tax-free transit benefits that they can use to ride Foothill Transit to work. This allows employers to save on payroll-related taxes, and workers to save on federal income taxes.
How they work:
Employers can allow employees to use pretax dollars or provide a tax-free employer-paid subsidy to pay for transit passes, vanpool fares and parking. Commuter tax benefits can be implemented through payroll and benefit management companies, and provided via paper vouchers, mail and direct load or benefit debit cards.
Where to get more information:
- The National Center for Transit Research – to access useful FAQs and a chart that helps you define your deductions
- Employer’s Tax Guide to Fringe Benefits IRS publication – to read exclusion rules that apply to benefits you provide to your employees for commuting to work
- A tax professional – to work out the tax details of the program and how they will affect your company