A commuter highway vehicle is any vehicle with a seating capacity of at least six adults, not including the driver. Get to and from work while having a little fun with electric moped ridesharing. A simple and affordable commuting alternative without the hassle of gas or keys. Understand the impact of our carbon footprint while working together towards a common goal.
Whether you take a train, bus, rideshare, or pay for your parking spot, if your company offers these benefits, you can save on these costs. This article explains commuter benefits and how employees can use them along with answers to common questions about this valuable job perk. After you set up the program, employees must enroll to receive benefits. Educate your employees on the program and thoroughly discuss the program rules. Make information accessible on how they can enroll, what the funds can be used for, how much they can contribute, and whether you are also contributing to their plans. But some cities, such as San Francisco, New York City, and Washington D.C., require you to offer transit benefits if you employ a certain number of full-time employees.
- Not all transportation-related expenses are included under commuter benefits.
- But keep in mind that if you stop working for your employer, you forfeit any unused money left in your account.
- Your employer can also make contributions to your FSA, if they want to offer a greater benefit to you.
- A commuter benefits program can provide a variety of transportation options that make it easier for employees to get to work, such as bike-sharing programs or shuttle services.
If employees participate in eligible vanpools through ride-share services, they may be able to use up to $300 per month on a pre-tax basis to cover this cost. Companies can also contribute to a pre-tax plan that will reimburse employees for their expenses related to eligible vanpools. If an eligible vanpool service is not available in your city, companies may decide to offer financial assistance to employees who travel to work via rideshare as a taxable benefit. Use your card at parking and transit providers to pay for qualified expenses like mass transit passes, tokens, fare cards and parking expenses. You can check your account balance at any time by signing in to your account.
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Generally, you can access the money in your commuter benefits account in a few ways. The answer to this question depends on the specific commuter benefits program. Some programs have expiration dates for the funds that are allocated to employees, while others may allow the funds to roll over from year to year. However, some commuter transit benefit employers allow commuter benefits funds to pay for Lyft Shared and Uber Pool rides. If you are using payroll software, enter the employee’s contribution amounts as a pre-tax deduction. That way, you can withhold the correct amount of taxes, pay the employee, and add their contribution to their commuter benefits plan.
Commuter transit and parking accounts allow you to use pre-tax funds to pay for commuting costs. Additionally, some cities and states have enacted commuter benefits laws that apply to certain businesses. When considering commuter benefits, you should determine https://turbo-tax.org/ if you are a covered employer under any of these laws and therefore required to provide benefits. So she enrolled in a benefit that allows commuters to deduct up to $270 a month from their paycheck for transit expenses while lowering their taxable income.
Enjoy the savings of commuter benefits
Commuting can be challenging for employees who live in areas with limited transportation options. A commuter benefits program can provide a variety of transportation options that make it easier for employees to get to work, such as bike-sharing programs or shuttle services. These options can be especially helpful for employees who live in areas that are not well-served by public transportation or who may not have access to a personal vehicle. By providing alternative transportation options, employers can help ensure that all employees have the ability to get to work reliably and efficiently, regardless of their location. If you are an employer looking for ways to improve employee satisfaction, reduce costs, and do your part to help save the planet, commuter benefits can be an excellent choice.
Offering these benefits decreases employee transportation costs and encourages your workforce to use public transportation, which is especially helpful in congested cities. Basic maintenance and repairs may be periodically needed on personal vehicles and bikes used for commuting to work. Some employers offer an allowance to help reduce some of these costs. Some companies offer them as part of their employee benefits package to help their employees save on their commutes. Make commuter benefits part of your organization’s value proposition for your employees and for your organization.
Stay up to date so your employees can get the most out of their benefits. Auto-carrier claim feed – This gives you the option to pay automatically from your account or hold to pay at a later date. A Health Reimbursement Arrangement (HRA) is a way for your employer to help offset your healthcare expenses. Your employer sets your plan annual contribution maximum, which must be within the IRS contribution limits. Any remaining balance at the end of the month rolls over to the next month.
Some companies also offer incentives for employees who walk or bike to work, such as equipment discounts or rewards for miles traveled. Reduce your commuting expenses by taking advantage of commuter benefits. The IRS allows for certain work-related transit and parking expenses to be deducted from your paycheck on a pre-tax basis. Because you do not pay taxes on these expenses, you can save on commuter expenses. Remote or hybrid work arrangements may help an employee reduce their transportation expenses by allowing them to skip their daily drive or train ride to work.
Setting up a commuter benefits program
Micromobility options such as bike-sharing or scooter-sharing programs may also be included in some commuter benefits programs. These programs allow employees to rent bicycles or electric scooters for short trips to and from work or for errands throughout the day. By offering these services, employers can help reduce traffic congestion, promote healthy habits, and reduce carbon emissions. Commuter benefits programs can be customized to meet the needs of each individual employer and their employees. Other types of commuting options that may be included in these programs could be shuttle services. By offering a variety of transportation choices, employers can help employees save money, reduce their carbon footprint, and improve their commuting experience.
III. DETERMINING NUMBER OF FULL-TIME EMPLOYEES
But keep in mind that if you stop working for your employer, you forfeit any unused money left in your account. Once an employee has been terminated, they have up to 90 days from their termination date to submit any expense claims. Airfares aren’t typically recognized as eligible expenses under this job benefit. Get up and running with free payroll setup, and enjoy free expert support.
Remember, you and your employee can only contribute up to a combined total of $315 per program per month. Or, you may be able to create and manage your account through your local transit agency. The benefits, which aim to reward commuters for taking transit to work, could now end up costing people money instead.
Employees usually can’t use commuter benefits funds to pay for fuel, mileage or other costs related to their vehicle. Generally, employees can’t use commuter benefits funds to pay for tunnel, bridge or highway tolls (E-ZPass). Now let’s say the employee contributes $200 a month to their commuter benefits plan. Because their taxable wages are now $1,800 ($2,000 – $200), you and the employee will only owe $137.70 each.
If you decide to offer a commuter benefits program, or if your business is located in a city that requires it, you need to know your employer responsibilities. Not all transportation-related expenses are included under commuter benefits. For example, an employee can’t use transit benefit funds to pay for things like gas or car insurance. Other types of commuter benefits may include company-provided vehicles or paying for fuel and maintenance costs for work-related use of an employee’s personal vehicle. Non-monetary assistance can also be provided through flexible or hybrid scheduling or coordinating carpooling among employees looking to share a ride to work.
Offering an employee benefits program for commuting can help companies comply with these regulations and avoid fines or penalties. Additionally, complying with these regulations can help the employer improve the company’s relationship with local authorities and the community in general. In general, commuter benefits are available to full-time and part-time employees who commute to work via public transportation.