Transit Can Be Less Taxing on Your Finances

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April 13, 2011

With tax day fast approaching, Caltrain and SamTrans can ease your tax burden. Employees and employers can take advantage of tax savings that are available through a federal pre-tax commuter benefits program.

Federal legislation signed by President Obama in 2009, and extended until the end of this calendar year, nearly doubled the allowable pre-tax commuter benefit amount from $120 to $230 per month. Up to $230 is allowed for parking expenses, as well. The hitch is that employers must participate.

What’s more, The Peninsula Traffic Congestion Relief Alliance is offering financial and other aid to San Mateo County employers interested in setting up a commuter benefits program through its Commuter Benefit Employer Incentive Program. This program provides assistance and cash awards from $75 to $1,000 to defray some of the initial employer program startup costs. The amount of the cash award depends on the size of the company and the level of transit or vanpool participation in pre-tax commuter benefit programs.

The benefit to pay for transit passes works one of three ways so that employers have more flexibility:

• Employers give their workers up to $230 for transit as a tax-free benefit.
• Employers give employees the option to use payroll deductions to avoid paying taxes on up to $230 a month in commuting costs.
• Employers and employees share the costs of the benefits.

Employees also do not pay federal income or payroll taxes on commuter transit benefits, except on the amount, if any, in excess of $230 per month. This more than covers the cost of any SamTrans Monthly Pass ($165 being the most expensive) and can cover a four-zone Caltrain Monthly pass, which costs $225.25.

For information, call 650-588-8170 or e-mail alliance@commute.org or visit www.commute.org. Alliance staff also will provide free consultation to companies which are considering starting a program.

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