Qualified transportation fringe benefits (Section 132(f) of the Internal Revenue Code) or "Commuter Tax Benefits" are like money in the bank. Employers save on payroll related taxes. Employees save on federal income taxes.
Employers may provide workers with up to $255 per month in tax-free transit and vanpool benefits as of January 1, 2016. The monthly limitation under Section 132(f)(2)(A) Qualified Transportation Fringe Benefits regarding the aggregate fringe benefit exclusion amount for vanpools (commuter highway vehicles) and transit passes is $255. The monthly limitation under Section 132(f)(2)(B) regarding the fringe benefit exclusion amount for qualified parking is $255. Commuters can combine both the transit and parking benefits. Employers can allow employees to use pretax dollars to pay for transit passes, vanpool fares and parking.
Transit riders and drivers aren't the only commuters that benefit through the tax code, as bicyclists can recieve up to $20 per month through a qualified pre-tax benefit from their employer.