Employer Transit Fare Program
Employer Transit Fare Program is a partnership between Metro Bus and local employers, which provides either free or discounted bus passes to employees. By subsidizing Metro Bus bus passes your employee’s fringe benefit package will be enhanced.
Transit benefits are very easy to administer, and unlike flexible spending accounts, are not subject to complex disclosure and reporting requirements. Tax-free transit commuter benefits are used by employers throughout the U.S. to subsidize the cost of employee commutes. The employer may provide bus passes free to their employees or may pay a portion of the cost providing employees with discounted prices.
This benefit is tax-free to the employee and is tax-deductible for employers under the Federal government, Section 132(f), 25 USC, plus a 30% state tax credit is also offered to the employer. Only that portion of the bus pass paid for by the EMPLOYER is eligible for the 30% state corporate tax credit.
How does the Employer Transit Fare Program work?
An employer signing up will receive the first month for free as a trial period for their employees to try the program. After the trial period, if an employer elects to participate, Metro Bus will discount the cost of 31-day passes and 10-ride cards purchased by the employer, who in turn must at a minumum match Metro Bus's discount or better, and sell or give the passes or ride cards to the employees through their workplace. The employer is required to cost share in the price of the pass or ride card by meeting or beating Metro Bus's discount to substantially lower the cost of bus fares for each participating employee.
What bus service will employees receive through the Employer Transit Fare Program?
- Metro Bus Fixed Route operates multiple routes on fixed timetables. Each route is either one-half hour or one hour long depending on the schedule.
- Metro Bus Dial-a-Ride is a reservations only, shared-ride service for individuals whose disabilities prevent them from being able to ride Metro Bus Fixed Route and general public passengers requiring a ride during the hours Metro Bus Fixed Route is not in service in their area (from 9:00 p.m. to Midnight Monday-Friday).
Users of the Metro Bus's Specialized Service a person with disabilities must be certified through an application process. All Metro Bus Dial-a-Ride and Metro Bus Fixed Route buses are wheelchair accessible.
Employers can sign up for discounted fares:
METRO BUS FIXED ROUTE
|
METRO BUS FIXED ROUTE |
PUBLIC COST |
METRO BUS DISCOUNT |
MINIMUM EMPLOYER MATCH DISCOUNT |
MAXIMUM EMPLOYEE COST |
|
31-DAY PASS |
$43.00 |
$4.50 |
$4.50 |
$34.00 |
|
10-RIDE PASS |
$ 9.00 |
$1.00 |
$1.00 |
$ 7.00 |
Prices effective 8/1/10
METRO BUS DIAL-A-RIDE
|
METRO BUS DIAL-A-RIDE |
PUBLIC COST |
METRO BUS DISCOUNT |
MINIMUM EMPLOYER MATCH DISCOUNT |
MAXIMUM EMPLOYEE COST |
|
31-DAY PASS |
$66.00 |
$5.00 |
$5.00 |
$56.00 |
|
10-RIDE PASS |
$20.00 |
$1.00 |
$1.00 |
$18.00 |
Prices effective 8/1/10
Metro Bus discounts the passes and ride cards and the employer must at a minimum match the discount. Participating employer may discount the fares further or may provide them at no cost to the employee.
Frequently Asked Questions:
Q:
What about tax credits? "Can you take advantage of both the federal and state pre-tax transit option and the Minnesota corporate tax credit for transit?"
A:
Yes. However, if an employer writes off the full expenditure on transit benefits as a cost of doing business on their federal and state tax returns, and claims the 30% state tax credit in the same year, then in the following year they would have to report the value of the 30% state tax credit as income. Employee paid (pre-tax income) transit benefits are not eligible for the Minnesota corporate income tax credit.
Q:
Do these programs affect the tax returns of employees?
A:
No. Employees are not required to retain any records or make any note of the transit benefit on their personal income tax form. Of course, their annual compensation will be reduced in cases with a salary reduction.
Call 320.251.1499 ext. 119 or email info@stcloudmtc.com for more information on Employer Transit Fare Program.
Program Facts
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- In partnership with Metro Bus, employers can provide discounted bus fares to their employees.
- Beginning with tax year 2000, employers who subsidize the cost of bus passes for employees and who currently pay state corporate income taxes can claim a credit on their tax return. The tax credit allows employers to reduce the amount of their state taxes by 30% for employee bus pass expenditures.
- Employers can provide transit as a tax-free employee benefit, or allow employees to pay for bus passes using pre-tax income up to $125 for transit passes and van pooling and up to $240 per month for commuter parking. Bike commuters can also be reimbursed for certain expenses (up to $20 month).
- What Employer Transit Fare Program Options are Available to Employers? Employers have three options available to provide subsidized Fare Share benefits to their employees:
- Employer-paid tax-free benefit to employees.
- Employee portion may be deducted through payroll deduction using pre-tax income.
- Any combination of employer or employee financial contributions.
