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Commuter Tax Incentives
 
What is the Commuter Choice Program?
Commuter Choice refers to recent changes in the Internal Revenue Code 26 USC 132(f) which permits your employer to offer you a tax-free benefit to commute to work by methods other than driving alone.

Can I receive the benefit in addition to or instead of salary?
Yes. There are several ways in which you may receive a transit or carpool/vanpool benefit.

First, your employer may elect to provide you the benefit in addition to your current salary. The benefit would be free of all payroll and federal income taxes to you. Your employer will have to decide whether to offer this benefit in addition to your income.

Second, your employer may permit you to have up to $230 per month taken out of your paycheck before taxes to pay towards the actual cost of commuting on transit or in vanpools. You would not pay federal income or payroll taxes on the amount of the benefit. Your W-2 would reflect a reduction equal to the amount of the benefit. This option is known as "pre-tax" benefit.

Third, your employer may share the cost of commuting with you. Your employer may elect to pay for a portion of your tax-free transit benefit and allow you to pay a portion of the costs by having your share taken out of your paycheck before taxes. To find out more, visit Commuter Choice.

What is the Maryland Tax Credit?
Maryland-based businesses that provide commuter benefits for employees may be entitled to a tax credit. Commuter benefits include an employee's travel to and from home and the workplace via a vanpool, transit or a parking "cash out" program. To find out more, visit Maryland Commuter Tax Credit.

For more information, contact Anne Kaiser at AKaiser@bethesda.org or
301-656-0868 x129.

Maryland Commuter Tax Credit Program
 
 


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