The commuter benefit is available to employees who commute to work via public transit (bus, rail, or ferry) or vanpool and wish to set aside money from their paychecks on a pre-tax basis to pay for qualified transportation expenses including parking. Only work-related transportation expenses are eligible commuter expenses. Save money while helping reduce traffic congestion and carbon emissions.
How Does the Commuter Benefit Work?
The federal tax code allows employees to exclude up to $270 per month from their taxable income to pay for qualified transit or vanpool costs while commuting to and from work and up to $270 per month to cover parking. You elect an annual amount to contribute on a pre-tax basis to your account. This annual amount is then divided by 52 (for employees paid weekly) or 24 (for employees paid semi-monthly) or by 12 (for employees paid monthly) to determine the amount deducted from each paycheck and deposited to the Commuter card to pay for eligible commuter expenses. You may also contribute unlimited post-tax dollars to your account.
Eligible Public Transit Expenses - Traveling to/from Work Include:
- Bus, rail, ferry, and vanpool expenses
Eligible Parking Expenses Include:
- Expenses for parking at or near work
- Expenses for parking for use in combination with mass transit, such as park-n-ride lots for bus/rail/train and airport parking.
How Can this Benefit Me?
Depending on the amount you contribute and your tax bracket, you could save up to $600 or more per year. See sample tax savings below:
Additional Links & Information
Contact TaxSaver at 888-602-6272 or taxsaverplan.com or the Benefits Service Center at 866-481-4922.
*The Social Security tax is currently imposed on the rest $117,000 (in 2014) of an employee’s income. Therefore, employees whose annual salary exceeds $117,000 will not experience any Social Security savings.
**Assumes a 6% state income tax on earners within the 15% federal income tax bracket; and assumes a 9.3% state income tax on earners in higher federal income tax brackets.