employers
tax resources:
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
employers can:
- underwrite the cost of their employees' transit or vanpool commutes, up to $230 per employee, per month for federal taxes
- offset qualified parking expenses up to $230 per employee, per month for federal taxes
- provide up to $20 monthly for bicycle commuters (thanks to the expanded emergency economic stabilization act of 2008 offering tax-favored commuter benefits to bicyclists)
- and these benefits are not considered taxable income for the employee for federal taxes
So you can enable your employees to set aside pre-tax dollars to purchase transit passes, pay vanpool fares, and to cover qualified parking costs. Pre-tax set-asides are subject to the same monthly limits.
You may offer the benefit outright, allow employees to set aside their own income, or select any combination of the two options. Under a shared approach, employers can provide a portion of the employees' transit, vanpool, or parking expenses, and allow employees to use pre-tax income to pay the balance (up to the specified limits)!
Compared to other benefits, commuter tax benefits are low-cost benefits, and they offer businesses a chance to reduce their payroll taxes. Employees benefit by receiving a tax-free transportation benefit, or by using pre-tax dollars to pay for their transit or vanpool fares.
Consult your tax advisor for state tax monthly caps, regulations, and implementation guidance.
Why not join the many massachusetts employers who already participate in these popular programs? to get started, email MassRIDES or call MassRIDES at 888-4COMMUTE today.
parking cash out
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.
