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Commuter Choice Tax Savings

The following summary was prepared to concisely but general explain qualified transportation fringe benefits (transportation in a commuter highway vehicle, transit passes, qualified parking, qualified bicycle reimbursement). There are exceptions (e.g. partner, 2% owners in S-corps) so you should check with your tax adviser or HR representative to meet your particular circumstances.

       

Transit

     

Vanpool

     

Qualified Parking

     

Qualified Bicycle Commuting

     

Incentive Levels

     

Up to $255/month for transit expenses

     

Up to $255month for vanpool expenses

     

Up to $255/month for parking at or near an employer’s worksite, or at a facility from which employee commutes via transit, vanpool, or carpool

     

Up to $20 per qualified bicycle commuting month, which is any month the employee regularly uses the bicycle for a substantial portion of travel between the employee’s residence and place of employment; and does not receive transportation in a commuter highway vehicle, a transit pass or qualified parking benefits

     

Employer Tax Benefit

     

Employers give their employees up to $255/month to commute via transit; the employer gets a tax deduction and saves over providing the same value in gross income

or

Employers allow employees to use pre-tax income to pay for transit and employers save on payroll tax (at least 7.65% savings)

or

A combination of both up to statutory limits

     

Employers give their employees up to $255month to commute via vanpool; the employer gets a tax deduction and saves over providing the same value in gross income

or

Employers allow employees to use pre-tax income to pay for vanpooling and employers save on payroll tax (at least 7.65% savings)

or

A combination of both up to statutory limits

     

Employers give their employees up to $255/month for qualified parking; employer gets a tax deduction and saves over providing same value in gross income

or

Employers allow employees to use pre-tax income to pay for qualified parking and employers save on payroll tax (at least 7.65% savings)

or

A combination of both up to statutory limits

     

Employers give their employees up to $20/month for qualified bicycle commuting; employer gets a tax deduction and saves over providing the same value in gross income

     

Employee Tax Benefit

     

Employee receives up to $255/month tax free (not on their W-2 form)

or

Employee pays for commute benefit with the pre-tax income and saves on income tax

or

A combination of both.

     

Employee receives up to $255month tax free (not on their W-2 form)

or

Employee pays for commute benefit with the pre-tax income and saves on income tax

or

A combination of both.

     

Employee receives up to $255/month tax free (not on their W-2 form) for qualified parking

or

Employee pays for commute benefit with the pre-tax income and saves on income tax

or

A combination of both.

             
NOTE: Neither this site nor any Georgia Commute Options service providers are engaged in rendering legal or financial advice, and provides this information free of charge solely to assist businesses exploring benefits for their respective employees. The information presented here does not constitute official tax guidance or a ruling by the U.S. Government. Taxpayers are encouraged to consult with the Internal Revenue Service or a tax professional for specific guidance related to the Federal tax law. By using these materials, the recipient (1) acknowledges and agrees that Georgia Commute Options makes no representations regarding the sufficiency (legal or otherwise) of these materials in any particular jurisdiction or for any particular business purpose, and (2) voluntarily and knowingly assumes all risks associated with their use.
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