Commuter Benefits 2024 Qualifying Expenses, Limits, & More

Many commuters have hundreds or even thousands of dollars tied up in transit benefits — money they earned and cannot use for other purposes like bills and mortgages. And they risk losing these benefits entirely if they are laid off or change employers, or if they simply do not go back to taking public transit. In addition, a well-planned benefits program can help strengthen the company culture and make it more attractive to potential employees. A positive culture can increase employee satisfaction and reduce turnover, which can save costs for the company in the long run. Only the Commuter Benefits solution uses pre-tax dollars for commuting expenses (up to $315 monthly for public transit and $315 monthly for parking). Watch our commuter benefits video to learn more about how you could save thousands of dollars — or more — with pretax funds.

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.

In addition to tax-free transit benefits, some commuter benefits programs also offer tax-free parking benefits. This one allows employees to pay for their parking expenses with pre-tax dollars, https://turbo-tax.org/ which can include expenses such as parking garages or lots near their workplace. By using pre-tax dollars to pay for parking expenses, employees can save money and reduce their taxable income.

1. Your employer sets your plan annual contribution maximum, which must be within the IRS contribution limits.
2. Typically, any unused funds left in your account at the end of the year can be carried over to the next plan year — as long as you remain with your current employer.
3. If you no longer have your previous card, please follow the instructions to request a replacement by clicking Manage Cards from the righthand side of the homepage.

You may also arrange to have your monthly payment sent directly to your parking provider, or pay to park, and then get reimbursed. Streaming or auto-rollover – You have two options if your employer selected integration with your health plan. Commuter benefits are most often used only for travel between home and work—not for expenses related to traveling from an office to another business or client meeting. From accurate calculations to unlimited payroll runs, it’s time to see what Patriot’s award-winning software can do for your business. If you are looking to outsource Paychex can help you manage HR, payroll, benefits, and more from our industry leading all-in-one solution. Depending on which program you select, your account will be ready for order processing in as little as 1-2 business days.

Additionally, some commuter benefits programs may offer incentives for employees who choose greener transportation alternatives, such as rewards for biking or walking to work. Many commuter benefits programs offer tax-free transit benefits, which allow employees to pay for their transit expenses with pre-tax dollars. This can include expenses such as subway, bus, or train fares, as well as vanpooling or ferry costs.

IX. TAX QUESTIONS – EMPLOYERS, EMPLOYEES

Talented candidates will be drawn to your organization if you make it irresistible. Offering transportation options that reduce commuting time can help employees arrive at work more rested and less stressed, which can increase productivity. Employees who have a better work-life balance also tend to be more productive and committed to their work. Micromobility add-ons are accessed thru the same system, same card as Edenred’s Commuter Benefits. Plus employees can add a personal debit or credit card to pay for expenses not covered by their benefits plans.

Ride-share expenses

We offer many options to pay for public transit such as our prepaid card, smart cards and transit passes. An employee benefits program can have a significant impact on a company’s culture. Employee benefits programs are essential for the success of a company and its ability to attract and retain high-quality talent. These programs offer employers a variety of advantages, commuter transit benefit ranging from increased productivity to compliance with local regulations. Below, we will discuss some of the main benefits that these programs can offer to employers. It’s important to note that self-employed individuals and independent contractors are not eligible for commuter benefits, as these benefits are tied to an employer-employee relationship.

In lieu of contributing to a commuter benefits plan, employers may need to provide employees with technology to work remotely, as well as office furnishings and equipment. To get a better idea of potential options, here are some common types of expenses covered under commuter benefits programs. Some cities and regions have regulations that require companies to offer sustainable transportation options or reduce the amount of traffic in congested areas.

How do I use my card?

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 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.

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.

Payment Methods

Please contact your plan administrator with questions about enrollment or plan restrictions. Use your commuter benefits to purchase qualified products and services. Submit your claim, and when the claim is validated and substantiated, a direct deposit generates the following business day into your bank account. An HRA is an employer-funded plan, so only your employer can contribute money to your account. To pay for a service or make a purchase, you need to have the available funds in your account. Your employer may let you roll over unused HRA funds from year to year, to incentivize you to stay more aware of your healthcare spending.

For example, the tax-free transit benefit under the IRS Section 132 program has a monthly cap and any unused funds do not roll over to the following month. However, the tax-free parking benefit has an annual limit and any unused funds can be carried over to the next year. Commuter benefits are typically offered by employers to their employees as a perk or incentive. However, the eligibility requirements for these benefits can vary depending on the specific program and the employer’s policies. We develop commuter and transit benefit plans to help overcome the challenges of getting to work each day. Our commuter plans help maximize tax savings for you and participants while also reducing input from your HR/benefits team.

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.

Top 5 pains of commuting and how commuter benefits can alleviate them

And it’s all managed by the employee through the same system and login as their pre-tax Commuter Benefits plan. The commutation benefit administered by HealthEquity offers a convenient opportunity to use pre- and post-tax payroll deductions to pay for your commuting expenses. Employer-Sponsored Plans are not individually owned and amounts available under the Employer-Sponsored Plan are not FDIC insured. Please contact a legal or tax professional for advice on eligibility, tax treatment, and restrictions.

Commuter benefits can help alleviate some of the stress and costs your employees experience when traveling to work. Expenses like parking fees, transit passes, and ride-sharing costs may be covered under employer-sponsored, pre-tax commuter benefits plans. As transportation and other related costs rise, companies may want to consider the value of adding perks for commuters. An employee benefits program can be a differentiator when it comes to attracting and retaining talent in a company.