Did you know that Transit Benefits can save money for both employees and employers by allowing employees to pay for transit through pretax dollars? Savings from Transit Benefits can be significant, and participating is easy for everyone.
Save on Taxes with Transit Benefits
Ventra’s pre-tax transit benefit program is a great way to extend a money-saving benefit to your employees at no cost to you. Employees who participate in the CTA / Ventra Transit Benefit program don’t have to pay income taxes on the pretax income they set aside for their commute, saving up to 40% per month for each employee on their commuting expenses, and employers can save on FICA and unemployment tax – almost 8%! Ventra’s pre-tax transit benefits program is offered free of charge (unlike other Third-Party Administrators), and can be used to fund transit on CTA, Pace and Metra (through the Ventra app).
What are Transit Benefits?
Transit benefits are a type of commuter benefit that allow employees to have their monthly commuting costs deducted from their paycheck, pre-tax.
The Ventra Transit Benefit Program is an employee benefit program administered by employers. Internal Revenue Code Section 132(f) “Qualified Transportation Fringe” allows employers to offer up to $300 per month in qualified commuter benefits tax-free. The program lets employees pay for their transit rides using pre-tax dollars – up to $300 per month ($3,600/year).Commuter benefits are intended to encourage the use of alternatives to driving alone to work to reduce congestion, reduce emissions, and improve accessibility to businesses.
Transportation Benefits Program Act
The State of Illinois passed a law known as the Transportation Benefits Program Act that requires some employers to offer their employees a pre-tax transit benefit. This means businesses with more than 50 full-time employees, located within a mile of fixed-route transit service inside the six-county RTA region, are required to offer employees the opportunity to make a monthly pre-tax payroll deduction for transit expenses. New hires will be eligible after 120 days of employment. (Link to legislation)
This Act goes into effect January 1, 2024. Employers can comply with this requirement by enrolling in the no-cost Ventra Transit Benefits Program.
How It Works
Employers either subsidize employees' transit costs at a level of their choice or designate a portion of an employee’s pretax income to pay for transit. The outcome is a reduction of taxes for employees and employers, regardless of the level of subsidization by the employer.
Go to ventrachicago.com/transitbenefits and fill out a simple online enrollment form, provide funding information, and you’re on your way!
For more information contact us at [email protected] or (312) 681-4005.