If you are an employer who employs at least 20 people in the state of New Jersey, you are now required to offer pre-tax commuter benefits to your employees. NJ is the first state to pass such an ordinance. Though the ordinance is effective immediately, there will not be any penalties for non-compliance until the final rules and regulations are released. This guidance is expected to be delivered no earlier than March 1, 2020. The Commission of Labor and Workforce Development will be responsible for administration and enforcement.
What are commuter benefits?
Commuter benefit plans allow employees to save on work-related transit and parking costs. Up to $265 in parking expenses and $265 in mass transit and vanpooling expenses can be paid pre-tax each month. The funds are deposited into participant accounts through convenient pre-tax payroll deductions and loaded onto debit cards for easy access. Additional funds can also be contributed on a post-tax basis to cover expenses in excess of these monthly limits for one convenient way to pay. Similar to 401(k) accounts, employers may also choose to make contributions to employees’ commuter benefit accounts.
Commuter benefit contributions are not considered employee wages, so your company can save on payroll taxes. Your employees also save on taxes and increase their take-home wages. As Coast Policy Director Jason Pavluchuk puts it, “transit benefits are a win-win for employers, commuters, and local government.”
Where can I get more information on commuter benefits?
Baker Tilly Vantagen administers both mass transit and parking commuter benefit account on behalf of employers of all sizes and located in all domestic geographies. Convenient stacking of these plans onto a single card solution makes real-time, point of service purchases a breeze. Our online tools and mobile app meet your employees where they are and give them access to their account anytime, anywhere. Contact us today if you are interested in learning more about how to implement commuter benefits.
The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Tax information, if any, contained in this communication was not intended or written to be used by any person for the purpose of avoiding penalties, nor should such information be construed as an opinion upon which any person may rely. The intended recipients of this communication and any attachments are not subject to any limitation on the disclosure of the tax treatment or tax structure of any transaction or matter that is the subject of this communication and any attachments.