The federal TEA-21 (Transportation Equity Act for the 21st Century) includes the Commuter Choice initiative which allows employers to offer employees benefits that encourage alternative commuting modes.

Transit, Vanpool and Parking Benefit Options

In 2007, benefits increased to $110 a month or $1,320 a year!

Employers, do you want to provide a low-cost benefit to employees? Help pay for employee transportation fares and you will save on taxes!

IRS rules allow companies to provide employees with financial assistance that reduces their commute costs while saving the company money.

Employers simply finance bus, rail or vanpool seats for their employees.

Employers may provide up to $110 per month, or $1,320 per year, per employee for bus and rail passes and vanpool vouchers. This is tax-free for the employee and tax deductible for the employer.

Commuters save more than $200 in taxes each year. Employers can also save in payroll taxes and other related expenses - a win-win solution.

For example:

Example #1:

Company provides $110 a month, through payroll, designated for CCT, MARTA, and/or vanpool seat.

TaxBreak #1: Company takes a deduction and doesn't pay any payroll taxes. Employee receives a tax-free benefit.

Example #2:

Company provides $110 a month worth of CCT/MARTA passes, and/or vanpool vouchers.

TaxBreak #2: Company takes a deduction. Employee receives a tax-free benefit.

Example #3:

Company provides $110 a month through a salary increase not specifically designated for CCT, MARTA, and/or vanpool seat.

TaxBreak #3: Employee receives additional income to ease commute costs, however there are no tax benefits.

Employers may also split the cost of the fares with the employee and only pay a portion. This will benefit the company and the employees up to the designated limits.

Assistance from CobbRides

View the above info in an easy to read table.

Tax Brochure; or, Contact Us for a hardcopy brochure.

IRS Tax Code 132(f) (pdf) for federal definitions

Tax Benefits Calculator to estimate the financial, environmental, traffic-related, and other benefits of clean commuting.