Commuter Choice is a provision of the Internal Revenue Code [(26 USC 132(f)] that permits an employer to pay for an employee’s cost of commuting to work, in other than a single occupancy vehicle. Basically, employers get a tax break for getting their employees to work using public transportation.
Some Frequently Asked Questions (FAQ):
Why is there a Commuter Choice Program?
It’s better for the environment. The program is designed to improve air quality, reduce traffic congestion, and conserve energy by encouraging employees to commute by means other than single occupancy motor vehicles.
How does the program operate?
Under Section 132 of the Internal Revenue Code (IRC), an employer may provide up to $65 per month to those employees who commute to work by transit or vanpool. The employer can deduct these costs as business expenses and the employees do not report the subsidy as income for tax purposes. The subsidy is considered a “qualified transportation fringe” benefit.
What constitutes the benefit?
An employer may provide cash reimbursement to an employee for public transit or vanpool transportation costs for trips taken between his/her home and place of employment. Such reimbursement is only permitted if a voucher or similar item which may be exchanged only for a transit or vanpool pass is not readily available. Cash reimbursement does not include cash advances. A transit pass includes any pass, token, farecard, voucher, or similar item entitling a person to transportation on mass transit facilities or provided by a vanpool.
What does this do for me?
Employees – If you are already commuting to work via public transportation, then speak to your employer. You may be able to have some or all of the monthly cost reimbursed to you. If you are interested in starting to use public transportation or in setting up a carpool, your employer may support you with the Commuter Choice program.
Employers – You can provide a benefit to your employees and help improve the environment, all while receiving a tax break for your company.
Contact Valerie Ragland by email or give her a call at 912-629-3924 to find out how Commuter Choice can help your employees get to work.
For more detailed information about the federal program, visit www.fta.dot.gov.