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Commuter Choice Maryland Saves You $$$

Throughout the state, specialists can work with you to design a transportation program that eases the pain of commuting for your employees. In addition to improving your company’s bottom line, these commuter programs can boost your employee recruitment and retention practices, increase employee productivity, and enhance corporate sustainability objectives.

Federal, and county incentive programs can turn your employees’ transit benefit program into tax savings for your company.  Maryland sweetens the pot by offering a state tax credit of 50% of the eligible costs of providing commuter benefits.

Maryland employers, including organizations exempt from taxation under §501(c)(3) or (4) of the Internal Revenue Code, may claim a tax credit for a portion of the eligible costs of providing commuter benefits to participating employees. The tax credit is 50% of the cost of providing the commuter benefits up to a maximum of $50 per month for each employee. If the credit is more than the state tax liability, the unused credit may not be carried forward to any other tax year.

A tax-exempt organization may estimate the amount of the tax credit for qualifying employees for the tax year. The total amount of the estimated credit should be divided evenly over the number of periods for filing withholding returns (Form MW506). For example, if quarterly returns are required, then the total estimated credit should be divided by four. Each payment to the Comptroller would be reduced by the pro rata amount of the credit. Alternatively, the tax-exempt organization could apply the credit against the tax on unrelated business taxable income. 

The tax credit is applicable to the following commuter benefits:

  1. Travel that took place in any of the following: A mass transit vehicle such as an MTA bus, MTA Commuter Bus, MTA Light Rail, MARC Train, WMATA Metrobus, or WMATA Metrorail used to transport an employee to or from home and the workplace.
  2. Company Vanpool program (Vanpool vehicle must have a seating capacity of atleast 6 adult individuals and be used primarily to transport employees between home and the workplace)
  3. Guaranteed Ride Home program (Must be employer cost to provide any of the following for their employees: Taxi, Car Rental, Company Vehicle, Transit)
  4. Parking "Cash-Out" program  

Required Documentation for Commuter Tax Credit:

For taxable years beginning after December 31, 2012, the income tax credit is available only on an electronically-filed income tax return for the tax year in which the credit is being claimed. The Form 500CR section of the return must be completed.

Insurance premiums tax: Documentation of the credit shall be maintained by the taxpayer in their files and be made available to the Insurance Commissioner, on request, in accordance with COMAR 31.06.04.03. The documentation should include documents from the agency granting the credit and a list of the names and telephone numbers for the taxpayer's staff who are directly involved in granting the credits. All information shall be retained for a minimum of three years from the date of the filing of the final tax return on which the credit is taken.

State and local income taxes withheld: Form MW508CR must be submitted with Form MW508, the Maryland Annual Employer Withholding Reconciliation Report to claim this credit against Maryland income tax withheld. If the tax-exempt entity is required to file the MW508 electronically, then MW508CR must be filed with an amended MW508A as the MW508CR is not available electronically at this time.

Include Registration Form:

Maryland Commuter Tax Credit Registration Form: [E-FORM COMING SOON!]:  Include the Commuter Tax Credit Registration Form each time a business applies for the Commuter Tax Credit. The registration form must be submitted to Commuter Choice Maryland via email at Commuterchoice@mdot.state.md.us or mailed to: Attention: MDOT Commuter Choice Maryland 7201 Corporate Center Drive, 2nd Floor, Hanover, Maryland 21076

To learn more about the Maryland Commuter Tax Benefit visit the Maryland State Comptroller's webpage devoted to the Commuter Tax.

Use the calculator below to see how much your company could save:

Please note: The Calculator works best in Google Chrome browser.

Commuter Benefit Tax Savings Calculator

Employer Paid Benefit

Pre-Tax Benefit

Note that employer and employee tax savings depend on average employee wages and tax rates. These calculations make general assumptions to provide a sense of potential benefits.

 


Employer Testimonials:

"From a leadership and business perspective, investing in a vanpool program is a smart decision, especially if your employees face transportation obstacles.” Steve Heise, Vice President Human Resources, Live! Casino & Hotel

“If we are having power outages and we need to get additional call center staff on the phones, when they work from home, we can get them on the phones within a matter of minutes.” Joe Trentacosta, Senior Vice President Southern Maryland Electric Cooperative (SMECO)

Commuter Testimonials:

“Teleworking enables me to spend less time commuting and more time with my family.” – Becky J., SMECO Teleworker

 “I save money each day, and the driver and other riders are friendly and funny.”  Dysha C., Maryland Live! Casino employee and vanpool commuter

“The vanpool is more convenient for those of us who live very far.” Taylor B., Maryland Live! Casino employee and vanpool commuter

“I enjoy riding in the vanpool because it’s more convenient at night...and I don’t have to worry about being late to work!” - Roniqua M., Maryland Live! Casino employee and vanpool commuter
 


 

Testimonials & Highlights Options for Commuters by Region Commuter Choice Maryland - Employers Brochure