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Getting Started: Option A
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OPTION A: Employee-paid pre-tax salary deduction
This option became law in 1998. It allows employees to purchase Commuter Checks
on a pre-tax basis, which reduces employee income tax, and all payroll taxes and
other payroll-based costs paid by employers. With this option there is no net cost
to employers.
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1. |
Tell your employees about Commuter Check and solicit enrollment.
You may wish to limit the number of denominations you offer to keep administration
simple. A start-up
announcement can explain the program to employees and allow them to authorize
salary deductions. We also have
additional information for employees considering signing up.
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2. |
Tabulate quantities and denominations. Determine the number of
Commuter Checks for each denomination you want; the sample order summary chart may also assist you.
Or visit the Participating
Cities page, for a complete list of available denominations by city. |
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3. |
Establish a payroll deduction code for Commuter Checks and arrange for payroll
deduction processing. No special record keeping or reporting is required;
you only need to satisfy your internal needs. The deducted amounts can appear on
employee pay stubs and on annual W-2 forms in Box 14 as non-taxable compensation.
If you use an outside payroll provider, click here for
Payroll System Interface guidance. |
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Order the Commuter Checks. Use the enrollment form to place your first Commuter
Check order. Submit the form with advance payment. To make re-ordering easy, we
send you timely reminders based on a quarterly, semi-annual or annual schedule;
see enrollment form for details.
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5. |
Distribute Commuter Checks to employees. Commuter Checks can be
distributed to employees at an established location; via hand delivery by an assigned
staff person; or mailed directly to their homes. Just as you would not leave paychecks
in open mailboxes, it is best to distribute Commuter Checks in a way that ensures
employees receive them. You may wish (but are not required) to have employees sign
a receipt for Commuter Checks with an
employee receipt form. |
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Let employees know how to participate in the program. Include a
description of the program in your personnel policy handbook and on appropriate
bulletin boards. You can also put up
posters to promote the program to new employees, or give them an introductory memo.
Be sure to include: |
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The contact person at your company |
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Enrollment information for existing and new employees |
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A listing of available Commuter Check denominations and where employees can redeem
Commuter Checks |
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How to change the amount employees receive |
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Local information and customer service phone numbers at participating transit agencies |
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Redeeming Commuter Checks. The easiest part of the program is that
once employees receive their Commuter Checks, they purchase their own transit passes
and tickets. You avoid handling any fare media! In your first shipment will be employee
flyers that outline how to use Commuter Checks. Click for sample copies of employee flyers. |
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Save copies of your Commuter Check order forms/invoice notices.
All costs, including processing fees and shipping charges, where applicable, are
deductible either as salary, employee benefit, or as an administrative expense.
The IRS currently requires no special documentation, record-keeping or substantiation
for Commuter Check.
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©2006 Commuter Check Services Corporation. All information on this site is
protected by copyright. |
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