Georgia employers have saved millions in taxes by helping their employees use commute alternatives. Taking advantage of these benefits is easy, and programs can be set up at any time.
Commuter Choice Tax Benefits
The Commuter Choice tax benefits program, based on Section 132(f) of the federal tax code, allows employers to offer employees a variety of financial incentives for using alternative commute modes. Section 132(f) covers transit, vanpool, and bicycle benefits as well as qualified parking.
State Income Tax Credit for Qualified Transportation Fringe Benefits
Employers can receive an annual $25 tax credit for each employee that utilizes a federal qualified transportation fringe benefit. Employees must use the commute alternative at least 10 times per month to qualify. This tax credit, provided by Code 48-7-29.3, is open to employers that pay State of Georgia corporate income tax and provide transit pass subsidies or vanpool subsidies for employees. For more information, contact us.
|Benefit||Employee Incentive||Employer Incentive|
|Pretax only||Employees may set aside up to $265/month for transit, vanpools and/or qualified parking and save on payroll taxes including FICA, local, state, and federal withholding||Employers save from a decrease in FICA payments as a result of shifting taxable salary (for which employers pay FICA) to pretax (no FICA)|
|Subsidy only||Employees receive the subsidy tax-free and pay no taxes on the amount||Employers do not have to pay FICA on the subsidy but can no longer deduct the payment as a business expense|
|Combination of Pretax and Subsidy||Employees receive the benefits for each portion listed above||Employers’ situation is the same for each portion as listed above|