How to comply with the ____ Transit Benefit

Ordinance

[City Seal]

Goal of workshop

Attendees will leave the workshop with a clear understanding of how IRS Section 132(f) works, how to comply with the transit benefit ordinance; and have an understanding of the options available to administer their program.

OverviewOverview of the OrdinanceUnderstanding the IRS Section 132(f) CodeOverview of the options available[bicycle benefit ?]

Transit Benefits Ordinance

• [Date of passage and number]

• [Summarize existing support in the business community]

• Designed to help achieve its goal to reduce CO2 emissions _______________

• Ordinance requires employers with at least __ employees to offer at least one of three benefit options.

• All employees counted (full-time, part-time, temporary)

• Include employees who work outside _____.

• Governmental entities not included.

Transit Benefits Ordinance details

[city]Benefits Ordinance

• ____ months till compliance (xx x, 20xx)• Non-compliance

– $xx for first violation– $xx for second violation (in same year)– $xx for each additional (in same year)

Transit has come a long way…

• 1991 – Transit benefit begins ($21 Maximum allowed only as a subsidy)

• 1998 – Commuter Choice Legislation Passes allows pre-tax deduction

• 2007 – Benefit increased to $115

• 2009 – Additional increase in cap to $230; $20 bicycle amendment

• 20__ -- __________ passes legislation

…and so has the transit benefit.

Saves up to $190 per employee per year in payroll taxes

Creates an excellent employee recruitment and retention tool

Improves employee morale and productivity

Reduces parking lot congestion with more transit/vanpool usage

Helps reduce local traffic congestion and improves air quality

Benefits to EmployersBenefits to Employers

Saves up to $1000 a year in personal income taxes

Creates an incentive to try a more relaxing and economical commute

Using transit or vanpools helps to improve air quality and the general quality of life

Benefits to Employees

Hundreds of employers already participate in __…

[Add additional logos here]

IRS and 132 (f)

-- Very Flexible --

2 Key Points:

-Cannot exceed maximum per month of $230

-No cash reimbursement

Three ways to offer the transit benefit:

A. pre-tax payroll deduction

B. subsidy, in addition to salary

C. a combination of the two

Two ways to set up your transit benefit:

A. Do it yourself Less than 100 employees

You have one work site

B. Have someone else do it for you--using a third party administrator (TPA)

Larger companies

Multiple work sites

Option #1: Do it Yourself…

9 steps to setting up your program

#1 Choose the type of program #1 Choose the type of program

Debit Cards

- IRS compliance

Transit Passes

- Available from all transit agencies

Vouchers

- Universal acceptance

#2 Get management approval #2 Get management approval

#3 Identify key personnel #3 Identify key personnel

#4 Create and distribute survey/enrollment form#4 Create and distribute survey/enrollment form

#5 Tabulate surveys#5 Tabulate surveys

#6 Arrange for payroll to establish a deduction code#6 Arrange for payroll to establish a deduction code

#7 Order passes/vouchers/debit cards#7 Order passes/vouchers/debit cards

#8 Distribute benefit

to employees

#8 Distribute benefit

to employees

#9 Update your personnel policy handbook#9 Update your personnel policy handbook

Option #2: Have someone else do it for

you

Selecting a Third Party Administrator

#1 Research options #1 Research options

Look online to see who can provide this service; talk with your payroll provider as well

#2 Meet with a representative #2 Meet with a representative

Make sure to understand costs, timeframes, and your responsibilities

#3 Sign agreement#3 Sign agreement

Also consider including bicycling—it is now covered

up to $20 a month!

“The mode of transportation that you choose has a greater effect on the

environment than any other decision you make as a

consumer.”

-Union of Concerned Scientists