Under the US federal tax code section 132(f), commuter benefits are a type of fringe benefit that is not taxed as income.
Commuter benefits allow employees to pay for commuting expenses with non-taxed dollars. As of 2020, commuters can elect up to $270 monthly to each parking and public transit costs. They won’t be taxed on these dollars as income, saving them up to $216 in taxes each month, and saving their employer on payroll taxes, too. While all employers have the option to provide this benefit to their employees, some cities and states mandate it. Click here to learn about commuter benefits regulations in your area.
Commuter benefits are an essential component of a competitive benefits package for a forward-thinking company. Nearly one in four employees has quit a job because of commute dissatisfaction. Offering pre-tax benefits and transit subsidy is a great first step toward a holistic commute program that brings flexibility, simplicity, and savings to the beginning and end of every workday.
With Luum’s commuter card, employees can use their pre-tax transit dollars to buy transit passes, pay commuter rail fares, or take a vanpool, their pre-tax parking dollars to reserve and pay for parking. Employees save on income tax, employers save on payroll tax, and enterprise commuters gain flexibility and daily choice — everybody wins.
BY TAYLOR SOPER on March 8, 2021 at 4:30 pm (excerpt from GeekWire) HealthEquity, a publicly-traded administrator of Health Savings Accounts (HSAs), has acquired Luum, a Seattle startup that helps employers manage commute benefits for their workers. Founded in 2012, Luum works with hospitals, universities, tech companies, and more, offering software that facilitates parking management and integration with mobility…