TMA-Employer Services

Financial Assistance for Employers

Setting up a commuter option program at the workplace can be rewarding in more ways than one. The following programs in New Jersey provide financial assistance to employers that offer commute option programs.

Commuter Choice refers to Section 132 (f) of the Federal Tax Code, which provides employers and employees with tax incentives for commuting to work by transit or in vanpools.
The law allows several ways for employers to participate, and they all result in tax savings.

- Employers can elect to provide the benefit in addition to salary as part of their benefits package, by paying the cost of the transit pass;
- Employees can pay for the passes or vouchers through pre tax payroll deductions offered by the employer;
- Employers and employees can share the cost, with the employer paying some and the employee paying for the rest through pre-tax payroll deductions.

Employers can also choose between purchasing vouchers through the Transit Chek program or NJ Transit passes through NJ TRANSIT's Business Pass program. Vouchers are redeemable by a variety of transit and vanpool providers. Business Pass can be used on NJ TRANSIT bus or rail lines, depending on the order. In any event, the costs paid by the employer up to the maximum are not subject to these federal payroll taxes: FICA, Pension, Unemployment, Workers Compensation, Disability Insurance.

In addition, business costs associated with administering the program are tax deductible as business expenses. The amount an employee receives or deducts, up to the maximum, is not subject to federal income tax. Click on the link below for more information.

New Jersey also offers State Income Tax incentives to employers who provide commute option programs and has a Challenge Grant program to help eligible employers develop innovative commute option programs. Greater Mercer TMA can provide details.