What are transit benefits?
Transit benefits, also known as transportation benefits or commuter benefits are a very attractive and valuable component of a company's benefits package. When employees participate in this voluntary program, they use tax-free dollars to pay for their eligible transportation expenses.
Types of plans
Transportation: Transportation plans pay for public transportation with pre-tax dollars. This plan continues from one year to the next and elections can be changed anytime.
Parking: Parking plans pay for the parking an employee may use while they are working with pre-tax dollars. This plan continues from one year to the next and elections can be changed at anytime.
Did you know?
Offering a qualified transit program can save your employees up to 40% off the cost of their commute to work? Major cities such as New York City, San Francisco and District of Columbia have passed transit benefit laws/ordinances that require employers with anywhere from 20-50 employees or more to offer a transit benefit plan to employees. These laws are environmentally friendly and puts savings in the hands of employers and their employees. Currently an estimated 2.7 million employees nationwide receive pre-tax commuter benefits.
- In 2020, the IRS mandated limit for pre-tax contributions to commuter benefits accounts increased:
To $270 per month in transit expenses
To $270 per month for parking expenses
If you need help administering your company commuter benefits program, contact benefitexpress today!