New Increase in Tax Savings for Connecticut Commuters
Commuters may be able to add convenience and save money as they travel to work in the new year. As of January 1, 2009, employers can offer their employees up to $120 per month in pre-tax commuting benefits toward monthly fares for trains, buses and vanpools. (Employers can also offer up to $230 per month for qualified parking.)
The Commuter Tax Benefit Program is provided as a commuter service by the Connecticut Department of Transportation. Employees who participate in the program may use the benefit when they commute to work on commuter trains, buses, in vanpools or toward the cost of qualified parking.
That’s good news for employees in the Greater New Haven area, who can choose from a variety of convenient transportation options, such as the Shore Line East Commuter Rail, New Haven Line (Metro-North) trains, CTTransit buses, DATTCO buses and Easy Street and employer vanpools.
In addition, helping employees find the quickest and most convenient commute possible can be a significant benefit for any company. Rideworks provides information on low-cost transportation options that improve the mobility of the work force and help employees get to work on time and less stressed.
The Commuter Tax Benefit Program is easy for employers to set up, often at little or no cost. Employers have three options for offering the benefit to employees:
Provide the benefit in addition to an employee’s current salary. The benefit is free of all payroll and income taxes to the employee, and the employer deducts the cost as a business expense.
Allow employees to deduct a portion of their gross income each month to pay for transit, vanpools and/or qualified parking. Employees would not pay income or payroll taxes on the amount of the deduction, and the employer would not pay payroll taxes because the amount is not treated as taxable income.
Provide employees with part of their commuting expense tax-free in addition to their current salary, while also allowing them to set aside pre-tax income to pay for the remaining amount of the benefit (up to the specified limits).
For more information on the Commuter Tax Benefit Program or to schedule an appointment, contact Brooke Hoberman, Rideworks’ Employer Services Coordinator, at email@example.com or 1-800-ALL-RIDE (1-800-255-7433), ext. 129). For information on other transportation alternatives, call Rideworks at 1-800-ALL-RIDE or visit