Commuter Benefits

Commuter benefits are authorized under Section 132(f) of the Internal Revenue Code. Currently, employers can provide a transit fare subsidy or allow employees to direct earnings towards transit expenses as pre-tax payroll deduction. The pre-tax option was authorized in 1998 and has proven to be extremely popular.

To take advantage of tax-free transit “fringe benefits,” as they are called, an employer can purchase transit passes directly from a transit operator and disperse them to employees, or they can choose to provide “Commuter Checks” which an employee can then use to purchase transit passes or tickets directly from the operator.

Information for Employers
Information for Employees