This content is provided by Montgomery County Department of Transportation.
FareShare, a program offered by the Montgomery County Department of Transportation, is giving Montgomery County employees even more reason to use public transportation to get to and from work. The Internal Revenue Service has increased the pre-tax limit for employer-provided commuting benefits to $300 per month, up from $280 last year, including transit passes and vanpool fares for 2023.
Employers will be reimbursed for all but $25 per month of their employees’ costs for commuting, up to $300 per month. The money is tax-free to both the employee and the employer. The program covers expenses incurred by commuters using Ride On bus, Metrobus, Metrorail or MARC train. It also covers expenses for vanpools of six people or more, as long as the employee commutes to and from a workplace within Montgomery County
Fareshare encourages the use of transit and vanpooling by employees working in Montgomery County. The program incentivizes businesses and employers to adopt these benefits, which are geared toward reducing traffic congestion and helping with the recruitment and retention of employees. Fareshare also aims to reduce employee commute time and increases productivity.
Providing employer-paid transit benefits and allowing employees to receive their benefits as pre-tax payroll deduction is a good way to persuade employees to switch to using transit and vanpooling, rather than driving to work. Commuters working in Montgomery County can receive the reimbursement by asking their employers to set up a transit benefits program.
The program encourages employers to start a commuter benefits program or to enhance their existing program by increasing the amount of transit subsidy offered to employees to attract more participants to sign up. If an employer does not yet offer a transit/vanpool benefit, Montgomery County Commuter Services will help them set up a commuter benefits program that fits the organization’s needs.
For example, if an employer offers a transit benefit of $125 per employee each month. The County $100 per employee each month. So, the employer only pays $25 per employee monthly. Companies interested in implementing or expanding a transportation benefit program must commit to covering the first $25 per month of travel costs for participating employees. The County will cover commuting costs over the initial $25, up to $300 a month. The full subsidy could be as high as $3,600 per year, for each employee. There is a maximum payout of $40,000 to each business per year.
In addition, employers are eligible for a state tax credit for 50 percent of their contribution, to a maximum of $100 per employee per month.
Employers will conduct a pre-program survey of employees at the worksite prior to implementation of the FareShare program. The company is expected to participate in subsequent Commuter Surveys every other year to evaluate impact on employee commuting choice.
Ultimately, the FareShare Program is designed for employers to help pay all or part of their employees’ transit and vanpool commuting expenses while getting a tax credit for their business. This allows for both employers and employees to help reduce pollution and traffic congestion and increase productivity.
To learn more about the program, go here or call 240-773-2989.
