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Traveling back and forth to work each day can be expensive. But commuting shouldn’t have to bring a heavy cost. And with CommuteEase, our transportation benefits solution, employees can take powerful advantage of pre-tax dollars to bring more of their money home.
Section 132(f) of federal tax law allows employees to use tax-free dollars (subject to monthly limits) to pay for their commuting expenses. The dollars spent on approved transit, parking and bicycling expenses are NOT subject to income, Social Security or FICA taxes. Assuming a combined tax rate of 30%, a participant can save as much as $400 per year on transit expenses of $1,200.
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Under the legislation, transportation benefits cover three categories of commuting expenses:
- Transit: Employees can use pre-tax dollars on different modes of public transportation, such as buses, subways, trains, and vanpools.
- Parking: Parking at or near your place of employment is an eligible pre-tax expense. In addition, parking at a location from which you commute to work, including by public transit, vanpool, is also a qualified expense.
- Bicycling: Employees who bike to work can use their commuter benefit toward equipment purchases, repairs and storage.
It’s important to note that mileage, tolls, fuel, and carpooling are NOT covered. Business travel and other reimbursed expenses are also excluded from this benefit.
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With more than 100,000 different types of tickets and passes, CommuteEase can meet nearly all of a participant's transit or parking needs. It's simple to set up recurring orders and we can email participants monthly, indicating current orders.
At Employee Benefits Corporation, we work hard to make your job easier. We’re in the “make it easy” business and CommuteEase is an easy-does-it solution. It’s a leading-edge solution that combines user-friendly online ordering with stellar service and expert support.
Additional Resources:
Employer Tax Savings Calculator |