Save Even More on Your Sustainable Commute

Federal funding for pre-tax commuter benefits has increased to $245 per month! This means that you are eligible to use even more pre-tax funds from your paycheck for transit or vanpool expenses. 

The American Taxpayer Relief Act of 2012* legislation recently passed by Congress and signed into law by the President includes a provision to increase pre-tax transit and vanpool benefits to $245/month. This increase reinstates parity between the pre-tax deduction amounts for transit/vanpool and parking.

• Pre-tax funds can be used to purchase transit tickets and passes, load Clipper Cards and pay for vanpool expenses

• The bike benefit is not included as an eligible pre-tax deduction and can be provided only as a subsidy at $20 per month

• Commuters using the full deduction amount can save more than $1,000 per year by using pre-tax dollars. Generally, San Francisco commuters save an average of $240 on transit expenses per year 

As an employer:

• If you are making pre-tax deductions for your employees, work with payroll staff to increase the maximum limit to $245

• If employees were previously making post-tax deductions over the previous $125 limit, convert those deductions to pre-tax, up to $245

• Notify employees of the benefit increase, they may opt to increase their deduction

• If you have a full-service vendor, they should notify participants of the new limit and make the necessary changes in their system. Check in with them to confirm that changes have been made

As an employee:

• If your monthly transportation costs are more than $125, you can increase your deduction amount to cover your expenses up to the new $245 limit

• Confirm with your employer or benefits provider that your post-tax deductions have been converted to pre-tax (up to the $245 pre-tax limit)                   

For additional information, contact the CommuteSmart team at [email protected] or 415.355.3727

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* The American Taxpayer Relief Act of 2012 (H.R. 8) (view pdf)