Time to dust off that tax-free commuter benefit. It’s been getting musty under the pile of better-known HR benefits — those health care and childcare programs — for the last two decades.
Only about half of employers — and likely a lower percentage of employees — even know that the benefit exists, according to a survey released Tuesday by the TransitCenter, Inc., a nonprofit that promotes mass transit. And yet, the commuter benefit could be provide a big boost to workers struggling with high gas prices and employers who report that commuting costs are beginning to affect worker retention.
The benefit works just like those other payroll set-asides, allowing employees to pull money out of their pre-tax pay for commuting expenses. Under the IRS rules, employees offered the benefit can set aside up to $115 per month to pay for transit and vanpool commuting costs, and up to $220 for commuter parking.
Employees who participate could realize tax savings of 30 to 40 percent of their out-of-pocket commuting expenses, according to TransitCenter, Inc.. For employers, offering a commuter benefits program can help lower their payroll taxes.
So why are fewer than one-quarter of the surveyed employers not offering the benefit?
A lack of mass transit options across America, according to the reponses given by the 1,283 human resource professionals queried in San Francisco, Chicago, New York City and other cities.
“It’s clear that when educated about the benefit, employees are eager to take advantage of it. However, even if every company signed up to deliver the benefit today, there isn’t enough mass transit capacity to let workers take full advantage..We ask companies across the country to join us in supporting the expansion of mass transit in their communities,” said Larry Filler, president and CEO of TransitCenter, whose stated mission is to reduce congestion and help clean the air. TransitCenter, based in NYC, also sells debit and transit cards under a TransitChek program that commuters can use on certain commuter rail systems.
Copyright © 2008 | Distributed by Noofangle Media
1 response so far ↓
1 jeffhenning // Oct 9, 2008 at 8:43 am
The recent “Bailout” plan also contains language that includes bicycle commuting in the commuter benefit. Also, vanpooling programs exist in virtually every major metropolitian area and are quick and easy to establish in areas where they don’t currently exist. See http://www.vanpoolusa.com.
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