V Transit Covered/not Covered By The Law
What types of transportation costs are covered under the law?Appendix ACan employees use their commuter benefits to pay the cost of more than one mode of transit during their commute?
|Scenario:George commutes to his full-time job at a bank in New York City using Long Island Rail Road and the subway. Can George use commuter benefits to pay for his train and subway costs? Yes. George can use his commuter benefits to pay for his LIRR ticket and his MetroCard. However, effective January 1, 2020, the monthly cap on pre-tax commuter benefits is $270 per month, so George may not be able to cover all of his expenses with pre-tax income.|
Does the law cover vanpooling?Does the law cover dollar vans or other commercial commuter van services?Does the law cover carpooling when employees who commute together use a privately owned vehicle?Does the law cover ridesharing transportation platforms, such as Via, Lyft, and UberPOOL, that offer transportation in a shared vehicle with a seating capacity of at least six adults ? Does the law cover ferry services into and within New York City?May employees use commuter benefits to pay for Access-A-Ride?May employees use commuter benefits to pay for discounted MetroCards under the Fair Fares NYC program?May employees use commuter benefits to pay for a reduced-fare MetroCard?Are CitiBikes covered by the law?
How Commuter Benefits Work
Commuter benefits allow employers to support their employees when it comes to their daily commute. Commuter benefits include parking benefits and transit benefits, as well as benefits for vanpool and bicycle commuting.
When an employee enrolls in a commuter benefits program, they can pay for their commuting costs with pre-tax money, up to the current IRS tax limit of $300 / month.
Because of the various ways employees commute, by car, bus, subways, trains, ferries, and vanpools, there are several ways employees can receive their benefit so that everyone is covered. For example, their tax-free dollars can be provided to pay for their commuting costs using:
Parking Cash Reimbursement
Once employees have enrolled and provided their commuting information, they can then receive their commuter benefit product directly at home, or at the workplace.
Its up to you, the employer, to choose the option that will work best for your company and your employees. Well help you make the right choice.
What should you expect from an ideal commuter benefits program?
The ideal commuter benefits program will have online platforms for both employers managing the program and employees participating in it, one that will offer ease, convenience, and flexibility for the ongoing monthly distribution of benefits and the ability to change when the commute changes.
Commuter Benefits in a Nutshell:
A company implements a commuter benefit program
How To Spend Parking Funds
Our prepaid cards offer the functionality and convenience of a reloadable, personalized, prepaid card for use at parking facilities nationwide. No receipts are necessary with this solution, just swipe and go!
Monthly Direct Pay
We can directly pay parking and vanpool providers on your behalf. This is a great option for commuters who pay for parking on a monthly or quarterly basis.
Commuter Check for Parking Vouchers
These vouchers are made payable to the parking provider of your choice and can be used to pay for parking expenses. Commuter Check for parking vouchers may be used to purchase one or more types of parking, and you can order as many vouchers as needed for multiple parking providers.
Parking Cash Reimbursement
Perfect for those who only park on an occasional basis, use multiple parking lots, park at parking meters, or utilize a parking provider that will not accept checks or third party payments.
Use your Commuter Check Prepaid Mastercard to pay for parking with SpotHero. With SpotHero, you can easily book affordable parking at more than 5,000 garages, lots and valets.
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What Expenses Are Eligible For This Pre
Public transportation, vanpools, carpools or commuter highway vehicles, as well as parking at or near your place of employment are all eligible pre-tax expenses. In addition, parking at a location from where you commute to work by public transit, vanpool or carpool, is also a qualified expense.
- If you carpool, only one member of the carpool can claim the parking expense on a pre-tax basis. It does not include parking at or near your residence.
- If you vanpool, the van must be primarily used for commuting , with a seating capacity of at least six adults excluding the driver and must be at least half full. A van that you or one of the other riders owns or operates as your personal vehicle is not a vanpool.
- Ineligible expenses include mileage, tolls and fuel, business travel and other reimbursed travel expenses.
Ix Tax Questions Employers Employees
What are the tax implications of NYCs Commuter Benefits Law?What is the maximum monthly amount of pre-tax income that an employee can use to pay for qualifying transportation expenses?Are employers required to provide parking as a pre-tax benefit?How do employers benefit from their employees opting to pay for commuter benefits with pre-tax income?Why should an employee choose to pay for commuting costs with pre-tax income?What if the cost of an employees commute is more than $270 ?
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Transit Deduction For Employers
In the past, businesses have been able to claim a federal income tax deduction on the amount they contributed to the commuter benefits program.
However, the Tax Cut and Jobs Act of 2017 eliminated the transit deduction for employers. You can no longer deduct commuter benefit contributions.
Although you cannot claim a transit deduction, you can still enjoy the payroll tax savings that come with offering commuter benefits.
Ask Your Employer About Enrolling In A Commuter Benefits Account Today
No matter how you get to and from work, a commuter benefits account is a simple, smart way to budget and manage your travel expenses. It gives you the flexibility to reduce your out-of-pocket costs on the train, bus, van-pooling, and even parking.
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Swipe And Save At Transit And Parking Providers
When you use your payment card for qualified transit or parking expenses, thereâs no paying cash upfront, no claim forms to fill out and no waiting for reimbursements.
Use your card at parking and transit providers to pay for qualified expenses like mass transit passes, tokens, fare cards and parking expenses. The cost of the expense is automatically deducted from your account. You can check your account balance at any time by signing in to your account.
Iii Determining Number Of Full
If an employer has full-time employees who work in a borough other than Manhattan, do the employees in the outer boroughs count toward the number of employees?If an employer has multiple locations, do all full-time employees count toward the number of employees?
|Scenarios:An employer has two locations in New York City. The first location employs eight full-time employees. The second location employs 14 full-time employees. Would this employer be required to offer commuter benefits? Yes. The employer employs a total of 22 full-time employees at the two locations. The employer must provide commuter benefits to all of its full-time employees. An employer owns seven retail stores in New York City. Each location employs seven full-time employees. Would this employer be required to offer commuter benefits? Yes. The business employs a total of 49 full-time employees at the retail stores. The business must provide commuter benefits to all of its full-time employees.|
Can employers with fewer than 20 full-time employees working in New York City offer commuter benefits to their employees?Does an employer with fewer than 20 full-time employees working in New York City but more than 20 full-time employees working outside of New York City have to offer commuter benefits?If an employer is part of a chain business, do all full-time employees count toward the number of employees?
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Why You Should Offer Commuter Benefits To Your Employees
- Employees save on commuting costs while employers save on payroll taxes.
- A great benefit that helps attract, retain and reward employees.
- Easy, hassle-free sign up leaves more time for other important tasks
- Helps create a happier, less stressed and productive work environment
Ready to start saving? We can help! Commuter Benefit Solutions offers programs designed for large, national organizations, medium-sized companies and small business. Each offers a full range of products for employees and specialized commuter benefits support and service for employees and employers.
If you want to learn more about commuter benefits to save money, download our 101 Guide now.
Easy Online Solutioncommuter Benefits Are Easy To Manage Online
Employees have all they need to manage commuter benefits on the PayFlex member website. After enrolling in the online commuter benefits program, they can:
- Order transit and parking passes, vouchers and a Commuter Check® card
- Add funds to a fare card
- Set up monthly direct pay for their parking provider
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How To Spend Biking Funds
Commuter Check for Bicycling Vouchers
Commuter Check for bicycling vouchers can be ordered in any denomination between $10 and $20 and are accepted at participating bicycle shops and bicycle storage facilities nationwide. Use them as payment towards bicycles, bicycle equipment, repairs, and/or storage fees associated with your commute to work. Please note: biking may not be offered under your current commute program, as itâs no longer considered a pre-tax eligible transit expense.
Setting Up A Commuter Benefits Program
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.
You can use a third-party administrator to set up your program. Generally, you will need to pay a fee per employee. Or, you may be able to create and manage your account through your local transit agency.
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.
Employees need to tell you how much they will contribute to their plan. Remember, you and your employee can only contribute up to a combined total of $280 per program per month.
When employees enroll, you need to adjust your payroll. If you are using payroll software, enter the employees 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.
Looking to simplify how you run payroll? Patriots online payroll services provide an affordable, accurate, and reliable option for managing payroll. Our online software is made for busy small business owners. Get your free trial today!
This article has been updated from its original publication date of September 12, 2018.
What Are The Benefits Of A Commuter Benefits Account
Tax BenefitsContributions to a commuter benefits account are deducted from your paycheck on a pre-tax basis, reducingyour taxable income. You can save an average of 30%* on your eligible transit and parking expenses.
*For illustrative purposes only. Savings calculations are based on a federal tax rate of 15%,state tax rate of 5%, and 7.65% FICA.
Stay In Compliance With Transit Ordinances
Transit ordinances are laws designed to reduce traffic congestion and protect the environment. In some cases, they require employers to offer commuter benefits to their employees. These laws are currently in effect in New York City, Washington D.C., Seattle and parts of California. Other cities will follow. We can help you stay up to date and in compliance with these ordinances.
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First Stop For Savings
TransitChek was the first provider of commuter benefit programs, and we’ve been an innovator ever since. Throughout the nation, each year we save millions for employees and their employers. Our unique and flexible products suit the needs of small businesses and Fortune 1000s alike.
TransitChek partners with you to help drive enrollment, because the more participants you have, the greater you save. And we make it easy to enroll, easy to use, and easy to administer by providing technology platforms and high-quality customer service that will really keep you moving.
Commuter Check Prepaid Mastercard
- The Commuter Check Prepaid Mastercard is a re-loadable commuter benefit card that is accepted at Transit Agencies or designated transit retail centers where only transit passes, tickets, and fare cards are sold.
- The Commuter Check Prepaid MasterCard can be used at Fare Vending Machines, which saves you time waiting in line and time locating a customer service desk or staffed sales area.
- In compliance with the IRS, the Commuter Check Prepaid MasterCard can only be accepted at designated outlets that sell transit products exclusively, such as Transit Stations and Kiosks. Stores that sell other products, such as gift shops and pharmacies , will not accept the Commuter Check Prepaid MasterCard.
- If you terminate from the university, your Commuter Check Prepaid MasterCard will only be active until the next order deadline of the 10th of the month. Please plan your orders carefully. For example: if you terminate from the university on May 19, 2019, your Commuter Check Prepaid MasterCard is valid until June 10, 2019. In accordance with IRS guidance, any remaining balances left on your Mastercard are not refundable.
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Are Commuter Benefits Worth It
On average, employees save 30% or more when they choose to set aside money in a pre-tax commuter benefit account. Participants can elect up to $255 per month for pre-tax mass transit and up to $255 per month for pre-tax parking. An employee with a $125 monthly expense saves an estimated $450* annually.
Why Offer A Commuter Benefits Program
- Employers save on FICA taxes
- Employers are able to provide cost-neutral pre-tax or low-cost tax-free subsidies to their staff, attracting and retaining employees with competitive transit benefits
- Employers can earn awards and public recognition for supporting sustainable commutes Employers and employees can open more parking for customers and reduce congestion near the workplace
- Employees who use a sustainable commute to work may be healthier and less stressed, potentially saving the company on health insurance claims and sick leave
- Employees incur lower transit, vanpool or costs than if they paid out of pocket
How Much Does It Cost
Some benefits administrators charge a flat fee for this service, while others charge a dollar amount per person or a percentage of the tax savings. Commuter benefits programs are often cost-neutral when using a third party vendor, to administer employee pre-tax spending programs due to payroll tax savings.
How Do I Choose A Vendor
All businesses are encouraged to shop around, first inquiring with their existing benefits administrator. ContactCommuteSeattleforalist of vendors who currently provide commuter benefits in the Seattle area.
For over 10 years, Commute Seattle has helped local businesses of all sizes unlock their potential and empower employees to use convenient, affordable, and sustainable transportation options. Commute Seattle offers free consultations to businesses interested in learning more about commuter benefits and ORCA Business programs. We provide consulting services, parking management strategies, best practices in providing transportation, and more. We also offer a variety of educational services including transportation fairs and commuter seminars.
Call 206-613-3131 or connect with us for more information or to schedule a free consultation.
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What Are Commuter Benefits Programs
Commuter benefits are employee perks that help your team offset the cost or time of commuting to and from work daily. These benefits can also be called transportation benefits, parking benefits, or employee transit benefits.
Some commuter benefits are offered by local governments, but most are established by employers as part of a benefits package. These benefits can either be pre-tax or taxable, with many organizations electing to follow guidance from the IRSfor providing qualified transportation benefits.
How Does It Work
If your employerâs plan design includes the online ordering model, youâll enter your parking and transit orders online, and the cost of your orders will be automatically deducted from your paycheck on a pre-tax basis.
No annual enrollment is needed. Simply submit your orders online anytime during the plan year.
You can even set up recurring orders that automatically generate your transit order or pay your contracted parking vendor. If your commuting needs change, you can adjust or cancel your order.
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How Do Commuter Benefits Work
- First off, commuter benefits allow employees to contribute to a transit or qualified parking fund out of their pre-tax That means that money they would be taxed on, and then have to put toward their commute, instead is only put toward their commute. This may not sound like a lot, but it adds up remember, employees go to work 5 days out of the week in most cases.
- If a company offers pre-tax transit benefits, youll talk to the HR department about setting up an account, as well as with accounting, to see how it might help your budget. Money from employees paychecks goes toward their commuter benefit fund.
- This fund can be used for a few different purposes:
- Contracting with a vanpool service for employees to use
- Loading up transit cards for public transit in your city or town
- Reimbursing commuters for their travel expenses