Commuter Check Saves AC Transit Riders Up To $480

Press Releases
12/26/2001

Tax-free Monthly Benefit Increases in 2002 from $65 to $100 New tax laws allow commuters to save up to $480 annually through Commuter Check. Commuter Checks are vouchers that are redeemed for mass transit fares. Beginning January 1, the maximum benefit for tax-free transit rises from its current level of $65 to $100 per month. The old law allowed commuters $65 per month or $780 annually. The new law now allows employers to give employees up to $100 per month or $1,200 per year in Commuter Checks as a pre-tax payroll deduction or a tax-free employee benefit. Here’s how it works. If an employee’s gross salary is reduced by $100 a month, for example, to buy $100 of Commuter Checks, the employee’s take-home pay falls by only $60; $40 in taxes per month is saved, or $480 annually. Employers get savings on payroll taxes based on the number of employees participating in the program and their salary levels. Employers can implement the program in one of three ways: They can offer Commuter Check as a benefit and decide how much to subsidize each month, offer a pre-tax salary reduction, or use a combination of both options. Under new IRS tax law (Section 132(f)), Commuter Check is a “Qualified Transportation Fringe Benefit.” Federal legislation now allows employers to provide Commuter Checks in place of existing salary. Under earlier legislation, Commuter Checks had to be provided as an additional benefit. “Commuter Checks now offer even larger savings to our employees, and they don’t pay taxes on it,” said Ruth Soderback of Trinity Capital Corporation in San Francisco. “The news is especially exciting for those who commute from the East Bay and the Peninsula. It’s a huge savings for them. Commuter Check allows us to help reduce emissions and assists in saving our environment.” Commuter Check Services Corporation, based in Englewood, New Jersey was formed in 1990 to operate transit fare discount programs as a self-supporting service in coordination with local public transit operators, metropolitan planning agencies, and State transportation departments. The company offers vouchers that are redeemable for transit passes, tickets, and tokens. AC Transit and all other transit operators throughout the Bay Area, including vanpools, accept such vouchers. About 80,000 commuters currently receive Commuter Checks. More than 3,200 Bay Area employers, have enrolled to participate in the program since 1991. For more information about Commuter Check, call 800-559-7909 or visit www.commutercheck.com.