If you work in New Jersey at a company with 20+ employees, your employer must offer pre-tax transportation fringe benefits to employees. With these tax benefits, you could save up to $900 a year on your commute!
Under Senate Bill No. 1567, which took effect March 1, 2020, employers must allow employees to set aside a portion of their pre-tax wages to cover costs associated with using mass transit, parking, or vanpooling. Currently, the Federal Government allows a pre-tax commuter benefit of $280 per month, which means you could save up to $900 per year by not paying federal income tax on your salary. An additional $280 per month is available to cover parking fees if you need to pay for parking when using transit.
What do I do if I’m an employee?
If you’re an employee interested in these tax benefits, check with your employer to see if it’s offered. You can start with the Benefits Department, Payroll, or Human Resources.
What do I do if I’m an employer?
Employers need to opt-in to either to NJ TRANSIT Bulk Sales program or a program offered by a third-party provider. Payroll services such as ADP also offer a transit pre-tax benefit option. TaxFree commuter benefits can be offered as an employee-funded tax-free payroll deduction or employer-funded benefit, or the employer and employee can share the costs.
To learn more about commuter tax benefits and how to take advantage of them, visit NJ TRANSIT’S Commuter Tax Benefits page.
