Commuter Tax Benefits Summary Table

Qualified transportation fringe benefits (Section 132(f) of the Internal Revenue Code) or "Commuter Tax Benefits" are like money in the bank. Employers save on payroll related taxes. Employees save on federal income taxes. Also check out Frequently Asked Questions for more details about Commuter Tax Benefits.

Employers may provide workers with up to $115 per month in tax-free transit and vanpool benefits in 2008 (according to Internal Revenue Bulletin: 2007-45 (November 5, 2007). The monthly limitation under Section 132(f)(2)(A) Qualified Transportation Fringe Benefits regarding the aggregate fringe benefit exclusion amount for vanpools (commuter highway vehicles) and transit passes is $115. The monthly limitation under Section 132(f)(2)(B) regarding the fringe benefit exclusion amount for qualified parking is $220. Commuters can receive both the transit and parking benefits (i.e., up to $335 per month). Employers can allow employees to use pretax dollars to pay for transit passes, vanpool fares and parking.

2008

	Transit	Vanpool	Qualified Parking
Incentive Levels	Up to $115/month* for transit expenses	Up to $115/month* for vanpool expenses	Up to $220/month** for parking at or near an employer’s worksite, or at a facility from which employee commutes via transit, vanpool, or carpool
Employer Tax Benefit	Employers give their employees up to $115/month* to commute via transit; gets a tax deduction and saves over providing same value in gross income or Employers allow employees to use pre-tax income to pay for transit and employers save on payroll tax (at least 7.65% savings) or A combination of both up to statutory limits	Employers give their employees up to $115/month* to commute via vanpool; gets a tax deduction and saves over providing same value in gross income or Employers allow employees to use pre-tax income to pay for vanpooling and employers save on payroll tax (at least 7.65% savings) or A combination of both up to statutory limits	Employers give their employees up to $220/month** for qualified parking; gets a tax deduction and saves over providing same value in gross income or Employers allow employees to use pre-tax income to pay for qualified parking and employers save on payroll tax (at least 7.65% savings) or A combination of both up to statutory limits
Employee Tax Benefit	Employee receives up to $115/month* tax free (not on their W-2 form) or Employee pays for commute benefit with the pre-tax income and saves on income tax or A combination of both	Employee receives up to $115/month* tax free (not on their W-2 form) or Employee pays for commute benefit with the pre-tax income and saves on income tax or A combination of both	Employee receives up to $220/month** tax free (not on their W-2 form) for qualified parking or Employee pays for commute benefit with the pre-tax income and saves on income tax or A combination of both

* tax free transit and vanpool benefit limit remained $115 per month beginning January 1, 2008

** tax free parking benefit limit increased to $220 per month beginning January 1, 2008

Vanpool or Transit Pass can be provided in addition to Qualified Parking for a total benefit of up to $335/month.

Additional Resources

IRS Final Rule on Section 132(f) (pdf)

FAQ about Commute Benefits

Executive Order 13150 Federal Workforce Transportation

VA Transit Benefit Program guidelines

US Dept of Agriculture Commute Transit Subsidy Benefit Directive

Federal Workforce Commute Benefits