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Commuter Choice Maryland Saves You $$$

 Maryland commuter can choose from an array of transportation options to save money, time, and ease the pain of commuting. Employees are not the only ones who benefit; employers improve their bottom line by offering commuter tax benefits.Federal, and county incentive programs can turn your employees’ transit benefit program into tax savings for your company.  

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.

Three options available to all Maryland employers can have valuable benefits:

Option 1a: Employer- Provided Transit Benefit:

Employers who cover the cost of a transit pass for their employees are eligible for commuter benefits (Transportation Fringe Benefits), which covers up to 50% of the cost ( up to $50 per month per employee). That means a $72 monthly transit pass would cost the employer only $36! This benefit can also be applied towards the cost of vanpool use.

 

Option 1b: Employee Pre-tax :

Employers who allow employees to set aside income on a pre-tax basis for transit, can save up to 7.65% on payroll taxes. Employees also save money on income ans payroll taxes-often a savings of about 25% (depending on tax rates). 

Example: An employee purchases a transit pass using a pre-tax salary deduction.

                 For an employee who takes transit to work with an approximate cost of $140 per month, pre-tax benefits result in savings of $59.55 a month

 

Option 1c: Combination Employer-Paid and Employee Pre-tax Benefit:

The employer can contribute a portion of the cost of transit and let the employee pay for the remainder with pre-tax income.

Example: An employer offers a limited transit subisdy while also allowing for use of the pre-tax benefit.

                For an employee who spends $200 per month on transit commuting costs, with a $100 subsidy and $100 pre-tax salary deduction the net cost to the employee is $70.23

 

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.

 

Maryland Commuter Tax Credit:

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 $100 per month for each employee. The tax credit can be taken against the state personal income tax, corporate income tax, or the insurance premium tax.

The tax credit is applicable to the following commuter benefits offered by employer:

  1. Travel that took place in any of the following: Publicly or Privately owned public transit systems 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.

For 501 (C)(3) & (4) complete and file tax form 508CR attached to MW508

All other businesses complete and file form 500CR 

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

 

Include Registration Form:

Maryland Commuter Tax Credit Registration Form: 

Click Here to be taken to ONLINE REGISTRATION FORM

You must re-register annually for this tax credit. 

To request a paper version of the registration please call 410-865-1100 or email Commuterchoice@mdot.state.md.us.

 


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