Commuter Choice

Saving Money and Cleaning the Urban Air

Posted: 29-Apr-2003; Updated: 13-May-2003

What is Commuter Choice?

• Commuter Choice is any one or series of incentives an employer offers an employee to not drive alone to work. These incentives promote use of transit and cut commuter costs.
  
• Commuter Choice incentives yield financial savings for both employer and employee, for example, through tax deductions.
  
• In other words, Commuter Choice is an inexpensive fringe benefit of employment.

• Employee-sponsored commute: Employers sponsor commuting costs as a fringe benefit for their employees. The Federal limit that qualifies for a business expense is $100 per employee per month (pe/pm). The employer may take a federal tax deduction for each employee who receives the benefit, up to $100 pe/pm.
  
• Pre-tax transit pass: Employers may allow employees to use pre-tax income to purchase a transit pass or voucher. As of January 2002, employers may deduct up to $100 per/pm.
  
• Parking cash-out: If an employee gives up an employee-paid parking space, the employer may opt to pay the cost of the space as taxable income to the employee up to the federal limit of $180 per month. An employer federal tax deduction is available up to this limit (however, FICA is not exempt to the employer).
  
• Share the fare: Employers may opt to pay a portion of their employees? commuting costs and offer the rest of the cost, up to federal limits, as a pre-tax option for employees.

• Employees who rely on transit to get to work save money with Commuter Choice.
  
• Employers reward employees with a federally subsidized benefit.
  
• A comprehensive Commuter Choice benefit package can provide a competitive edge in attracting and retaining employees. Tax deductions offset the cost of the benefit.
  
• Commuter Choice can free up valued parking spaces by giving employees the "parking cash-out" option.

• Employees cut their commute costs and see take-home pay increase. This is especially valuable to entry level workers, who spend the greatest percentage of their salary getting to and from work.

• Reduce congestion: Commuter Choice reduces reliance on cars and gives incentives to use transit.
  
• Clean the air: Commuter Choice also reduces the amount of urban airborne pollutants that trigger ozone, smog, asthma and respiratory ailments.
  
• Prevent climate change: Commuter Choice thereby reduces greenhouse gas emissions from mobile sources.

For more Information:

www.commuterchoice.com - This Web site provides information on Commuter Choice programs and how employees, employers and communities can benefit from Commuter Choice. It is designed as a first-stop website with links to help employess and employers get the information they need to use or adopt Commuter Choice incentives.

www.commuterchoice.gov - This is the U.S. EPA's Web site containing information on the Commuter Choice Leadership Initiative.