Commuter Tax Benefits: Qualified Transportation Fringe Benefits

Florida Department of Transportation (FDOT), its employees, and supporting teams do not provide tax, legal, or accounting advice. The following information is for informational purposes only, and is not intended to provide, nor should it be relied upon, for tax, legal, or accounting advice. Companies and individuals should consult their own tax, legal, and accounting advisors before launching a qualified transportation fringe benefit program.

Under Section 132(f) of the Internal Revenue Code – known as Qualified Transportation Fringe
Benefits – employers can offer a pre-tax commuter benefit. This program saves the employer
payroll-related taxes, as well as saves the employee money on federal income taxes. Back to top

Pre-Tax Commuter Benefits

  • The employer allows employees to use pre-tax income (up to $315 a month) to pay for a transit pass or to cover vanpool expenses.
  • Allowing your employees to designate part of their income as “pre-tax” lowers the amount your company pays on payroll taxes. Back to top

Other Commuter Benefit Information

  • Employers can provide up to $315 a month to individual employees to pay for a transit pass or qualified parking as a qualified transportation fringe benefit, which is excluded from an employee’s taxable wages.
  • Businesses may no longer deduct the cost of providing or implementing this benefit. Back to top

Other Details

As of 2018, non-profit organizations that provide qualified transportation fringe benefits to their employees may be subject to unrelated business income tax. Businesses of all types should work with their tax professionals to work out the tax details of the program and how they will affect your company. Back to top