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The tax benefits of helping your employees utilize an alternative
form of transportation are many. Here are three ways to take advantage
of the tax-savings:
- The employee pays for a transit pass or vanpool seat
with pre-tax money. Under Section 132 (f) of the Internal Revenue Code, Qualified Transportation Fringe Benefits allow employees to set
aside up to $230 per month pre-tax for transit or vanpool expenses,
similar to a flexible spending plan for medical expenses. The employee pays
no income tax on the benefit and the employer saves on payroll
taxes.
- The employer pays the cost of a transit pass or
vanpool seat and is able to deduct the cost of providing the benefit.
- The employee and the employer can share the cost of the transit
pass or vanpool seat and both share in the savings.


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