Tax Benefits
Federal Tax Code – Commuter Choice
Tax incentive programs can have a positive impact on your payroll tax liability. Federal Tax Code allows employers to provide tax-free transit and vanpool benefits for their employees. Taking advantage of these benefits is easy, and programs can be set up at any time. There are three Commuter Choice options, each one offering benefits to you and your employees:
- Employees Pay - and Save (Pre-Tax Payroll Deduction) Similar to health savings plans or eligible childcare expenses, you can set aside up to $230 per month out of your current pay, then use those pre-tax dollars to pay the cost of qualified commuting. You’ll save federal income taxes and payroll taxes.
- Employer Pays - and Saves (Tax-Free Employee Benefit) Your employer chooses to cover the full cost of the tax-free benefit – up to $230 per month for transit and vanpool expenses or $20 for cycling. The benefit is offered tax-free to you and lowers payroll taxes for you and your employer.
- Employee & Employer Share the Cost - and Savings You and your employer each pay a share. For example, your employer might offer $100 per month in transit/vanpool benefits and allow you to reserve up to $130 per month as a pre-tax benefit. The total tax-free benefit remains $230 per month. The same rules apply for the $20 per month bicycling benefit.
Employers across the U.S. have saved millions by taking advantage of these benefits. Contact BATMA for more information or download the following information:
- IRS Employer’s Tax Guide to Fringe Benefits
- Commuter Choice Overview
*Based on corporate tax rate of 34%
Note: The information presented here does not constitute official tax guidance or a ruling by the U.S. Government. Taxpayers are urged to consult with the Internal Revenue Service of the U.S. Department of Treasury or a tax professional for specific guidance related to the Federal tax law.
Bicycle Commuters Tax Credit
As an employer, you can offer a $20 per month tax credit per cycling employee. The credit will cover employers' costs to reimburse bicycle commuters for "reasonable expenses" including buying a bicycle, improvements, repair, and storage, if the bicycle is regularly used to travel to and from work. Read more here.
Georgia Telework Tax Credit
The State of Georgia is offering a telework tax credit for employers that pay income tax in the state of Georgia. Employers can take a credit of up to $20,000 for creating a new program, with an additional $1,200 tax credit for each new teleworker. Applications are due by Oct. 31st. Click here for FAQs |
