Pre-Tax Transit Benefits

The IRS allows employees to deduct up to $300/month of pre-tax salary for commuting on shared transit. Here’s how to get the most from this program.

Trains, ferries, and long-haul buses are great alternatives to driving for Bay Area commuters. Employers can help their employees reduce their tax burden while also reducing stress and congestion by providing "pre-tax transit benefits," or what the IRS calls Qualified Transportation Benefits.

Companies can administer this program themselves, or use a 3rd-party benefits administrator. Providing this option is also the easiest way to comply with the Bay Area Commuter Benefits Program, a requirement for any company within the Bay Area Air-Quality Management District’s boundaries with 50 or more full-time employees.

ProTip

Turbocharge your public-transit programs by helping folks get to and from the station, solving the dreaded “first-mile/last-mile” problem. At LinkedIn, I helped establish a very popular “Lyft to Transit” program, which provides full-time employees with a subsidy for rides to/from their nearest transit hub, like BART and Caltrain stations, as well as ferry and bus terminals. With this addition, commuters who live too far from a station to walk can easily get to one without worrying about leaving their car somewhere all day.

Whether your goals are to compete for talent across the region, reduce congestion, or minimize your carbon footprint, CommuteSource is here to help you design such programs, and promote them so they're as effective as possible. Email us to get started.