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What States Require Commuter Benefits?

By August 14, 2019January 13th, 2022No Comments

Municipal government action on commuter benefits ordinances is increasing. But what states require commuter benefits you ask? Just one: New Jersey.

This year, Seattle joined New York, San Francisco and other municipalities with the passage of its commuter benefits ordinance slated to begin in 2020. The Association for Commuter Transportation is pushing for more cities through its “25 by 20 Transit Benefits Ordinance Campaign”, where it seeks to have 25 local governments pass ordinances by the end of 2020.

New Jersey remains the lone state to act on a commuter benefits law. New Jersey passed its law in April. It mandates all businesses at least 20 people must offer commuter benefits to workers who average 10 hours or more per week.

What municipality or state be next?

Chances are a city will be the next government body to pass a commuter benefits type law. Los Angeles is currently researching a commuter benefits ordinance. While there may be proposals in various state legislatures, there are no known upcoming votes.

While it’s nice to have local governments recognize the benefits of commuter benefits, it would be even better if an entire state adopted a law. And even without it, any employer can offer commuter benefits by following IRS fringe benefit guidelines.

The basic details of commuter benefits

Employees can save up to 40 percent tax-free in their paychecks to apply the money toward commuting costs. The maximum amount an employee can save is $265 per month. Public transit, rideshares and qualified parking are all eligible for commuter benefits.

Employers can also save because the payroll tax is less as employees are saving their money tax-free. A company can save $41 per month for each participating employee by offering commuter benefits. With 50 employees in the program for one year, you save more than $24,000 annually. If that number reaches 75 employees, you can save $36,000 per year.

To learn more about commuter benefits, download the 101 Guide.

Download the Commuter Benefits 101 Guide