Published November 21, 2006
Volume 14, Number 11

Commuter Choice Tax Benefit Program to Increase Compensation in 2007

Nearly everyone agrees that alternatives to driving alone to work can save them time and money while offering the added bonus of having a positive impact on the environment. However, not everyone may know that programs are available that can make their transit dollars go further. The Commuter Choice Tax Benefit offers employers and employees a win-win commute proposition that increases in value as of January 1.

Based on Section 132(f) of the federal tax code, the program allows employers to offer employees a variety of financial incentives for the use of alternative commute modes, including buses, trains, and vanpools. Employers can offer the benefit in one of three ways: in addition to compensation, in lieu of compensation (allowing employees to set aside pre-tax dollars to pay for the transit or vanpool costs), or as a combination of these two methods (employers subsidize part of the commuting cost and allow employees to pay for the remainder of the cost, up to the monthly limit, with pre-tax dollars). Using the program literally means commute alternatives can be used at a discount as the dollars used toward the alternative come tax free.

Current tax laws allow employers to offer employees up to $105 per month for transit, vanpool and qualified parking costs. Thanks to recent changes in the tax code, that number will go up to $110 in 2007.

Taking advantage of this benefit is simple:

First, ask your human resources staff if your employer offers Commuter Tax Benefits. If not, ask them to consider contacting an employer services representative of the 511 Regional Rideshare Program. The 511 Regional Rideshare Program can provide you with complete details on the different ways your company can offer the program as well as information on service providers who can make managing the program an easy task.

If you enroll in the Commuter Choice program, it is important to use a qualifying commute alternative. The benefit is available to commuters who are in a vanpool, take public transit or use qualified parking. Vanpool drivers can receive additional benefits by registering with the 511.org Ridematch Service.

For more information about Commuter Tax Benefits, contact the 511 Regional Rideshare Program by dialing 511 and saying, “Rideshare.” The Hacienda Owners Association is also a great resource for information on the Commuter Choice Tax Benefit as well as a variety of other commute-related issues. They can be contacted at (925) 734-6500.


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