In Partnership with Your Organization

Updated January 2020

Employers save on payroll taxes. Employees save on federal income tax.

According to Internal Revenue Service Section 132(f), the Qualified Transportation Fringe Benefit certain commuter costs are tax-deductible:

• $270 per month for transit and vanpool fares
• additionally, a second monthly maximum of $270 can be set aside for qualified parking expenses

NOTE: you can deduct both the transit/vanpool and the parking costs for a combined total of $540 per month. However, each benefit's total cannot exceed $270 per month.

Fringe Benefits are excluded from taxable gross income and are also excluded from the Federal Insurance Contributions Act (FICA) taxes (social security and Medicare, including Additional Medicare Tax) and Federal income tax withholding. Check your tax codes to see if the same deductions are allowed on your state taxes.

For answers to frequently asked questions about Internal Revenue Code Section 132(f), please visit the Best Places to Work for Commuters website: https://www.bestworkplaces.org/resource-center/faq-on-qualified-transportation-fringe-benefits/

DISCLAIMER:

Neither this site nor any eCommuter Commute Options services 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 eCommuter 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.

Driving alone has hidden costs to commuters. Use the eCommuter Commute Calculator tool to accurately compare the costs of different transportation modes. 

Be sure to keep in mind that if your employer subsidizes commute options, such as mass transit, carpooling, or vanpooling your costs may be even lower.

According to the U.S. Census Bureau's recent American Community Survey, the average American's commute is up to 26.9 minutes one-way. Instead of driving in traffic alone, you could gain that commute time back by sharing the ride in a carpool, vanpool, or on public transit. You could use that time to get your daily workout in by choosing an active commute mode such as biking, running, or walking.

With each shared or sustainable transportation trip you take in place of driving alone, you help to improve the air quality of your community.

By recording your one-time and frequently used commutes in the eCommuter Commute Calendar you will see your personal environmental impact. See details on your vehicle miles saved, pollution reducstions, and greenhouse gas emissions.

When you offer employees a less stressful way to get to work, you might find that they arrive happier, healthier, and ready to be productive.

The U.S. Environmental Protection Agency published a report saying that 86% of American workers consider commuter benefits to be “beneficial and useful,” and that employees who work for companies that “minimize the stress and expense of commuting find their companies to be more attractive places to work.”

Psychology Today, wrote in an article that "The ride to work is … associated with increased blood pressure, musculoskeletal problems, lower frustration tolerance, and higher levels of anxiety and hostility (Marlynn Wei M.D., J.D.)." According to Dr. Mehmet Oz of the Dr. Oz show "up to 90% of all doctor visits in the United States are for stress-related illnesses."