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Commuter Choice Maryland Saves You $$$

Throughout the state, specialists can work with you to design a program that eases the pain of commuting for your employees. Vanpool, telework, transit, and other options can become important recruiting and retention tools for your company. And Federal, state, and some county incentive programs can turn your employees’ transit benefit program into tax savings for your company. That can improve your bottom line while helping to retain valuable employees. Use the calculators below to learn more.


Three Options to Calculate your Savings

  1. Employer Supported Option
  2. Employee Pre-Tax Option
  3. Employee and Employer Combination Option

 

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Federal Employer Supported Option

  • Employer provides an employee up to $225 per month in tax-free commuter benefits.
  • The employee rides transit all month for low or no cost.
  • The employer takes a federal and state tax deduction as a normal business expense on the amount of the benefit given to the employee.
  • Example below is based on employer paying at 25% federal tax rate and 8.25% state tax rate.
  • This option qualifies for the MD Commuter Tax Credit and is shown in calculation below.

 


 

Maryland Commuter Tax Credit Benefit

Maryland sweetens the pot by offering a tax credit of 50% of the eligible costs of providing commuter benefits. 

Maryland employers, including 501(c)(3) or (4) organizations, may claim a tax credit for 50% of the eligible costs of providing commuter benefits up to a maximum of $100.00 per participating employee per month. The tax credit can be taken against the State personal income tax, corporate income tax or the insurance premium tax.

Organizations that are tax-exempt under Internal Revenue Code 501(c)(3) may be eligible to claim certain business tax credits against their witholding taxes. These qualified organizations no longer will use Form 500CR, but will use Form 508CR as an attachment to Form MW508 (Annual Employer Withholding Reconciliation Return). Visit marylandtaxes.com to obtain a 500CR form. 

The credit is applicable to the following expenses:

  1. MDOT MTA passes, tickets, fare cards
  2. Company Vanpool program
  3. Guaranteed Ride Home program
  4. Cash-In-Lieu of Parking program

 

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