Tax Deductible

About Commuter Tax Deductions

Updated January 2020

Employers save on payroll taxes. Employees save on federal income tax.

According to Internal Revenue Service Section 132(f), the Qualified Transportation Fringe Benefit certain commuter costs are tax-deductible:
  • $270 per month for transit and vanpool fares
  • additionally, a second monthly maximum of $270 can be set aside for qualified parking expenses
NOTE: you can deduct both the transit/vanpool and the parking costs for a combined total of $540 per month. However, each benefit's total cannot exceed $270 per month.
Fringe Benefits are excluded from taxable gross income and are also excluded from the Federal Insurance Contributions Act (FICA) taxes (social security and Medicare, including Additional Medicare Tax) and Federal income tax withholding. Check your tax codes to see if the same deductions are allowed on your state taxes.

For answers to frequently asked questions about Internal Revenue Code Section 132(f), please visit the Best Places to Work for Commuters website: https://www.bestworkplaces.org/resource-center/faq-on-qualified-transportation-fringe-benefits/
DISCLAIMER:
Neither this site nor any eCommuter Commute Options services providers are engaged in rendering legal or financial advice, and provides this information free of charge solely to assist businesses exploring benefits for their respective employees. The information presented here does not constitute official tax guidance or a ruling by the U.S. Government. Taxpayers are encouraged to consult with the Internal Revenue Service or a tax professional for specific guidance related to the Federal tax law. By using these materials, the recipient (1) acknowledges and agrees that eCommuter Commute Options makes no representations regarding the sufficiency (legal or otherwise) of these materials in any particular jurisdiction or for any particular business purpose, and (2) voluntarily and knowingly assumes all risks associated with their use.
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