What is Commuter Check?
What are the benefits of Commuter Check?
How long has it been available?
How do employers use Commuter Check? Do I have to give a monthly benefit?
How do employees use Commuter Check?
What are the relevant tax laws? Is Commuter Check considered taxable income?
How much do employers and employees save?
Who can participate? Are any employers too large or too small for the program?
What does it cost?
Can I get Commuter Checks in any denomination?
Do I need to keep detailed records?
How do I order Commuter Checks? How often can I order?
What if my city is not served?
How are Commuter Checks delivered to me?
How do I get the order form?

What is Commuter Check?
The Commuter Check program is a “fringe benefit” available to employees allowing them to save taxes on their qualified commuting expenses. Commuter Checks are vouchers accepted by transit operators for purchase of transit passes, tokens and tickets. Commuter Check’s ParkChek is a voucher accepted by parking operators to pay for commute-related parking expenses. Commuter Check was developed to allow the business community to help reduce traffic congestion, improve the environment and promote transit use. With Commuter Checks, employers can reduce their employees’ commuting costs by 40% while trimming total salary costs.

According to the Federal tax law revision that became law in 1998, employees are allowed to take a pre-tax salary reduction to pay for transit fares are qualified parking. Thousands of employers also purchase Commuter Checks as an employee benefit provided in addition to salary, based on legislation first enacted in the 1980s.

What are the benefits of Commuter Check?
Commuter Check has many benefits. Employers sensitive to tax savings, employee morale, improved recruitment and reduced turnover are prominent Commuter Check customers. They have found that it enhances their benefits package without increasing overall compensation costs. Employers reduce FICA and other payroll-related costs by using Commuter Checks to subsidize employee commuting costs. With Commuter Checks employees can be compensated with a salary equivalent value that greatly exceeds the cost of the vouchers.

Commuter Check also increases employee awareness of transit options and builds ridership. Since it is extremely popular with employees, it is an effective way for firms to indicate their concern for the environment. Commuter Check users have noted reduced stress from not driving, increased job satisfaction, improved on-time arrival and enhanced productivity. It also keeps an employer’s benefits package competitive.

Promoting transit with tangible incentives like Commuter Check provides strong motivation for transit use. In a San Francisco Bay Area study, Commuter Check was found to have increased transit use by an average of 30% at participating employers, and in some cases, by over 100%.

How long has it been available?
Transit fringe benefits have become increasingly popular. The first legislation on transit benefits appeared in 1984. The 1998 tax code revision that allows employees to take a pre-tax salary reduction to pay for transit fares has made employer-provided transit support very popular.

How do employers use Commuter Check? Do I have to give a monthly benefit?
Commuter Check is a flexible program and is easily tailored for any company. It can be used as a pre-tax salary substitute, monthly benefit, incentive or bonus, to assist employees moving to a new location, or to introduce new employees to transit. Employers may give Commuter Checks to selected groups of employees such as clerical staff or to all employees. Employers also find Commuter Check effective in recruiting new employees and in helping reduce turnover.

How do employees use Commuter Check?
Commuter Checks are simple to use. Employees redeem Commuter Checks for transit tickets, tokens or passes from participating transit operators (public or private). They are conveniently redeemed at staffed sales offices, retail sales outlets, etc., for any type of prepaid fare in basically the same way as cash payments. They are also accepted by vanpools. ParkCheks are redeemed for commute-related parking expenses. They are accepted by parking operators around the country. Commuter Check vouchers cannot be exchanged for cash or used for any purchase other than those specified above. Click here for information specific to your area.

What are the relevant tax laws? Is Commuter Check considered taxable income?
Section 132(f) of federal tax law encourages employers to assist employee mass transit commuting costs by allowing tax-free subsidies of transit passes, tickets, tokens, etc. The maximum tax-free discount that can be provided for transit is $110 per month. Additionally, the law provides for tax-free parking of up to $215 per month.

Initially, Congress required employers who provided transit benefits to do so by supplementing employee salaries. This gave employees a tax-free cash-like raise without increasing employer FICA obligations. While tax efficient, it was still an added business expense for employers.

The 1998 changes in Federal tax law allow employees to take a pre-tax salary reduction to pay for transit fares or parking expenses. Under this law, employees can save up to $480 in yearly transit costs, and almost $1000 a year in parking costs, when tax savings are considered. These changes still allow the employer to offer Commuter Check as a supplement to salary, or as a combination of the benefit and pre-tax options.

How much do employers and employees save?
Employees and employers save all income and payroll taxes on the amount of money provided for commuting. Up to $110 a month ($1,320 a year) can be provided tax-free for transit and vanpools. Due to the tax savings, employees can save over $500 in annual commuting costs, while employers save approximately $96 per year per employee. For parking expenses, up to $215 a month (or $2,580 a year) can be provided tax-free, resulting in almost $1,000 in tax savings for the employee and close to $200 per year per employee for the company. These examples assume a 33 percent combined Federal and State income tax rate; Social Security (FICA) taxes paid by both employers and employees (7.65% of salary); and unemployment, disability, workman's compensation and retirement costs driven by salary. These savings on payroll taxes are provided to all employers, including non-profit and public sector employers that do not pay income or FICA taxes. Click here for a tax savings worksheet.

Additionally, "for-profit" employers who provide transportation benefits to supplement employee salaries can deduct the entire cost of the program (including administrative fees) as a business expense.

Who can participate? Are any employers too large or too small for the program?
All types of employers from single person offices to large businesses with multiple locations and from every industry category in the private, public and non-profit sectors participate in Commuter Check. Commuter Check allows any size company to provide commuting discounts very economically, while avoiding the administrative burden of handling monthly passes.

What does it cost?
In most cities, employers pay the face value of the Commuter Check plus an administrative and handling fee of approximately 3% on each order. For example, a $20 Commuter Check would cost $20.60. In some cities, the sponsoring transit agency covers the administrative fees, leaving the program free to employers. Click here to see an enrollment and order form, or for further information.

Can I get Commuter Checks in any denomination?
Denominations vary by city and are determined by the local agencies sponsoring the program in each city or metropolitan area. Each city’s order form provides complete information on denominations available. Commuter Check is designed to be a simple, easy to administer program. Click here to see an enrollment and order form, or for further information.

Do I need to keep detailed records?
No complex record keeping is required. Like any company expenditure, copies of order forms and canceled checks should be kept. No special IRS reporting, such as W-2 or 1099 statements, is required. (If an employer wants to report pre-tax deductions on W-2s, box 14 can be used.)

How do I order Commuter Checks? How often can I order?
Employers in participating cities simply submit their order on-line by clicking here or complete a paper order form and submit payment; the first Commuter Checks can be delivered within 10 working days, and subsequent reorders are sent even faster.

What if my city is not served?
For cities that would like to establish a Commuter Check program, we can work with your local transit agency to have a program up and running in 90 days. Just call or send us an e-mail telling us which city you are in and we'll get started right away.

How are Commuter Checks delivered to me?
Commuter Checks are routinely shipped via UPS and arrive within 2-5 working days of shipment. Overnight delivery is available for an additional fee.

How do I get the order form?
To download or print an order form, go to Order Forms and click on the city of your choice.

If you are unable to download the order form or if it prints illegibly, please call us at (800) 531-2828, fax us at (857) 228-1414, or e-mail us info@commutercheck.com and we will promptly fax or e-mail the form to you. Please be sure to note which city form you need.