Employers - Tax savings
Give Them Tax Savings
You can offer your employees tax-favored benefits. They just need to be qualified commuters under section 132(f) of the federal tax code. Call us and we'll let you know how it works. 888-4COMMUTE
Commuter Tax Benefits
Join the hundreds of the Commonwealth’s leading corporations who offer employees tax favored commuter benefits.
Companies throughout Massachusetts can help their employees save money, as well as offer savings to their businesses by offering transit benefits. Businesses in Massachusetts have three options when they choose to offer tax favored benefits to their staff:
- Employers may subsidize the entire cost of an employee’s transit or vanpool expenses per month. As of January 1, 2014, the transit/vanpool benefit cap is $130 per month per employee.
- Employers can offer to their staff the opportunity to set aside pre-tax dollars to purchase transit passes or pay vanpool fares. Under the 2014 limits, employees may set aside a maximum of $130 of pre-tax income per month to spend on their transportation to work.
- Many companies offer a combination of the above two options, meaning companies can choose to directly subsidize a percentage of the monthly cap, and then employees can make up the difference with pre-tax income.
In addition to offering assistance to their employees for the purchase of transit passes or vanpool commutes, companies may also:
• Directly subsidize, allow employees to designate pre-tax wages, or offer a combination of these two options for qualified parking expenses. As of January 1, 2014, the monthly cap is $250 per month per employee. • Directly subsidize $20 per month for bicycle commuters.
This incentive program offers savings to your employees and to your business. Compared to other benefits, transit benefits are cost-effective and offer businesses the opportunity to lower their payroll taxes. Your employees enjoy the flexibility to designate pre-tax dollars to pay for their own transportation and vanpool fares or receive a tax-free transportation benefit directly from your company.
Please consult with your tax advisor for more information on the 2014 rates, state tax monthly caps, and implementation guidance. Please e-mail MassRIDES or call MassRIDES at 888-4COMMUTE today.
If you who already offer free parking to your employees, and are looking for a way to reduce your parking expenses, parking cash out may be the way to go.
- Businesses can "cash-out" the value of an employee's parking space for a determined value
- And the employee receives taxable income, and agrees to relinquish the parking space
Parking cash out works best when employers own their own parking, lease expensive off-site parking, or are considering building new parking facilities.