DC Commuter Benefits Law
As of January 1, 2016, employers with 20 or more employees in the District of Columbia are required to offer pre-tax or subsidized commuter benefits for use on Metro, buses, vanpools and other forms of mass transit.
The DC Commuter Benefits Law was included in the Sustainable DC Omnibus Amendment Act of 2014 to expand transit benefits access to Washington, DC employees and to make the District - in one generation - the healthiest, greenest and most livable city in the United States.
What are the employer options for the DC Commuter Benefits Law?
Benefit Option #1: Employee-paid pre-tax contribution
Benefit Option #2: Employer-paid direct benefits
Benefit Option #3: Employer-provided shuttle or vanpool
For more information and resources, please visit our DC Commuter Benefits Law page.
What are Commuter Benefits?
Commuter Benefits are transportation fringe benefits regulated under Section 132(f) of the IRS Tax Code, allowing employees to reduce their monthly commuting expenses for transit, vanpool, biking and parking. Employers can offer employees a range of pre-tax or subsidized transit benefits, as well as a host of related perks such as secure bike parking and assistance finding a carpool.
What Types of Tax-Free Commuter Benefits are Available?
Commuters can set aside pre-tax dollars for use on Metro, buses, vanpools and other forms of mass transit. Employers may choose to subsidize commuters’ transit fares or mix and match with pre-tax fares. The IRS allows a total of $255/month to be excluded from each employee’s taxable income.
Employers can reimburse bicycle commuters up to $20/month (or $240/year) for bicycle-related expenses or provide a $20 voucher each month redeemable at local bike shops. Please note: a commuter can only receive EITHER the transit benefit OR the bicycling benefit each month. Learn more about how to offer the Bicycle Commuter Benefit.
Additional Taxable Benefits
Employers may offer a taxable walking benefit to employees who walk to work. Additionally, many employers provide commuter benefits greater than the IRS limits and simply withhold taxes on the portion over the limit.
View our list of complimentary services for more ideas to help make your employees’ commutes easier than ever.
Why Offer Commuter Benefits?
Reduced Cost and Tax Savings Employees can save up to 40% on their commute costs by reducing their taxable income and the out-of-pocket expense of commuting. Employers see tax savings on FICA payroll taxes.
Recruitment and Retention Increases job satisfaction and improves employee retention. Promotes healthy, active transportation and lower healthcare costs. Helps reduce employee stress from commuting and related expenses.
Sustainability and Recognition Be seen as forward-thinking and committed to being a green workplace. Compete for elite designations like Best Workplaces for Commuters and Bicycle Friendly Business. Earn Leadership in Energy and Environmental Design. (LEED) credits.
DC Employer Success Story
American Wind and Energy Association (AWEA)
American Wind Energy Association (AWEA) works to grow wind energy and power a cleaner, stronger United States. Striving to promote eco-friendly initiatives, the national trade association empowers their employees to use sustainable forms of transportation and touts a bike-friendly workplace reputation. In 2016, the AWEA introduced free annual Capital Bikeshare memberships to their employees for use on daily commutes—a healthy and low-cost benefit in addition to their existing pre-tax transit benefits program.Download the AWEA Success Story FOX Architects
FOX Architects, an award-winning architecture and interior design firm based in Washington D.C., seeks to encourage employee satisfaction and maintain a high employee retention rate. Leading up to the DC Commuter Benefits Law implementation, the firm saw an ideal opportunity to expand their employee benefits and introduced a new pre-tax transit benefits program in January 2016.Download the FOX Architects Success Story