Commuter Benefit Solutions

Transcription

1 Commuter Benefit Solutions Learn more about the NYC Transit Ordinance 1 of 11

2 Contents What are Commuter Benefits? 3 What is the New York City Transit Ordinance? 5 Complying with the NYC Transit Ordinance 8 Who are Commuter Benefit Solutions? 9 Programs & Product Offerings 10 Getting Started 11 2 of 11

3 The Commuter Benefit is a tax-free fringe benefit, aut horized by the Internal Revenue Code 132(f), that allows your hardworking employees to pay for certain commuting costs using pre-tax money. How does the benefit work? Employees can have eligible commuting expenses taken directly out of their paychecks each month. This money is taken out on a pretax basis, which reduces their taxable income. So, participants end up saving on Federal, state, and FICA taxes. And, because Commuter Benefits are considered tax-free benefits and NOT employee wages, your company also saves up to 7.65% on payroll taxes. What are Commuter Benefits? 3 of 11

4 Based on an employee that makes $50,000 a year. SAMPLE TAX SAVINGS TOTAL FOR ALL PARTICIPANTS Eligible employees 100 Tax Saving % 40% Employee 7.65% Employer Actual Participants 50 Participants Commuting Expenses $100/mo. ($1,200 annually) ANNUAL TAX SAVINGS* Employee $400 Employer $4,590 What are considered eligible commuting expenses? The pre-tax Commuter Benefit covers transit, parking, and vanpool costs, including: Transportation to or from work via subway, train, bus, or ferry Parking at or near the office at meters, garages, or lots Parking at a commuter lot where commuters transfer to mass transit Vanpool fees How do employees save? Here s an example: An employee makes $50,000 a year. And, the monthly MTA pass costs $ Let s say the employee buys 12 MTA monthly passes each year. Since the pass is now pre-tax, the taxable income will be reduced by $1,398, which means a savings of approximately $420* for the year. How do companies save? Let s say Company X has a total of 1,000 employees and a 30% participation rate of the Commuter Benefit. Company X ends up saving $5,852 each month on payroll taxes, which adds up to $70,227 a year! And the savings will grow as more employees take advantage of the benefit. *Estimated Savings are for example purposes only. Your individual savings may vary depending on your location, income and personal tax situation. 4 of 11

5 The NYC Transit Ordinance, also known as INT. No. 295-A and Local Law 53, requires New York City employers, located in the five boroughs (Manhattan, Brooklyn, the Bronx, Queens, and Staten Island), with 20 or more full-time employees to offer the pre-tax Commuter Benefit for transit. NYC employers DO NOT have to offer Parking Benefits. What types of transportation are included as part of the Transit Benefit? NYC Regional Mass Transit (MTA, LIRR, Amtrak, New Jersey Transit, Metro-North) Eligible ferry and water taxi services Eligible vanpools Commuter bus services Access-A-Ride What is the NYC Transit Ordinance? Who is considered a full-time employee? The law defines a full-time employee as someone who works on average 30 hours or more per week for an employer. 5 of 11

6 Are there any exemptions? Yes, Federal, state, and local government entities and those employers where a collective bargaining agreement exists between any group of employees and an employer are exempt. However, at companies where the number of full-time employees not covered by a bargaining agreement is 20 or more, those employees that are not covered must be offered the Transit Benefit. There is a third exemption for companies that are not required by law to pay Federal, state, and city payroll taxes. When will this go into effect? The NYC Transit Ordinance went into effect on January 1, However, companies have a 6-month grace period (until July 1, 2016) to comply. Any company found in violation of the Ordinance after the grace period date of July 1, 2016, will have 90 days to comply with the ordinance before any penalties are imposed. What is the penalty for failing to comply? First violation penalties will range between $100 and $250. Any subsequent violations will cost $250 for each month (or 30 days) the company is not in compliance. Are the penalties per company or per employee? Penalties are imposed per company. Employers have 90 days to fix violations before penalties are imposed? How does that work? If your company is fined for failing to comply with the NYC Ordinance, you will have 90 days to comply in order to avoid the penalty. What happens if a company doesn t comply within that 90-day window? Any company that doesn t comply during the 90-day violation window will be charged with a subsequent violation and will have to pay an additional $250 penalty every 30 days until compliance is completed. Who will enforce the NYC Transit Ordinance? The Department of Consumer Affairs will be administering this law. My business is headquartered outside of New York City. Does the Ordinance still apply? It depends on whether or not you have offices in New York City. If you have 20 or more employees that work in the five boroughs, then yes, the Ordinance applies to your company. 6 of 11

7 Does this Ordinance cover employees that commute into the city from the suburbs? Yes, if you have employees commuting from the suburbs to an office in one of the five boroughs, then yes, it includes them. Do my employees have to be residents of New York City to qualify for the Benefit? No, they just have to work in one of the five boroughs. My company has an office in New York City and one in Long Island. Do I have to offer the Benefit to my Long Island office, too? Technically, you only have to offer the Benefit to employees working in your offices located in New York City s five boroughs. But, the more employees that use the program, the more you save on payroll taxes. So, why not offer it to those working and taking public transportation in Long Island, too? I know the Ordinance doesn t apply to part-time employees. But, can I offer Commuter Benefits to them anyway? Yes, you can. What if an employee doesn t want the Benefit? If employees don t want to take advantage of saving on their commuting costs with Commuter Benefits, that is their choice. As long as you offer a Transit Benefit program and keep records of who does and does not wish to participate, you are in compliance with the law. What if my company is a non-profit? Non-profit companies are NOT exempt from the Ordinance if they have 20 or more full-time employees working in New York City and pay payroll taxes. What do I have to do to show I m in compliance? You ll need to show in writing that every eligible employee has been given the opportunity to participate in the Transit Benefit program. Employees must also be notified about the program in writing. Additionally, companies need to keep detailed records of who has opted in the Transit Benefit program and who has declined to participate. 7 of 11

8 How does my company go about complying with the NYC Transit Ordinance? Commuter Benefit Solutions can definitely help you with this! The Department of Consumer Affairs has a list of steps every company needs to take in order to comply. All of which we guide you through! 1. Implement a pre-tax transit Benefit program. Choose one of our customizable budget-friendly program options, and we ll get your company up and running. 2. Alert your current employees and any future employees you hire about this program. Please Note: This MUST be done in writing. You will need to provide written communication to all of your eligible employees that this pre-tax transit program exists and that they have the option to opt in or opt out. Employees must sign and date this document to indicate they know of the benefit and whether or not they want to use it. You can find a sample form here. We can also create a form on your behalf to distribute to your employees. Complying with the NYC Transit 3. Maintain records. The Department of Consumer Affairs requires employers to keep detailed records of all employees and whether or not they have opted to participate in the Commuter Benefits program or if they have opted not to sign up. Employers should keep at least two years of records regarding usage of this benefit on file. 8 of 11

9 We are the industry experts! Commuter Benefit Solutions is the nation s leading provider of Commuter Benefits, serving approximately 10% of Fortune 500 companies, 20% of Fortune 100 companies, and 53 of the nation s premiere benefit administrators. We ve been making Commuter Benefits a staple in employee benefit packages nationwide since 1985 and currently manage commuter programs for some of the largest transit authorities in the country: Boston, Chicago, and Philadelphia. It also doesn t hurt that we offer 4,400 different products that are accepted at 460 transit agencies, more than 650 bicycle shops (and growing), and 5,000 parking and vanpool locations across the U.S. Over the past five years, we ve saved our participating employers over $75 million in tax savings and their participating employees more than $400 million in pre-tax savings. Our employee surveys show that our corporate customers use these savings to hire new employees, invest in research and development and increase marketing. Who are Commuter Benefit Solutions? 9 of 11

10 Commuter Check Programs We offer a wide range of employer-based solutions that provide the flexibility you need while staying within your budget. Discover which Commuter Check program is ideally suited for you. Customize Your Solution Products Based on the Commuter Benefits program you select, employees have the choice to redeem vouchers, use our Commuter Check Prepaid Mastercard, electronically reload Smart Cards, or directly receive the transit and bus passes they already use. See Our Product Offerings Programs & Product Offerings The Commuter Check Prepaid Mastercard may only be used for qualified commuter benefit purchases in accordance with IRS Tax Code 132(f). No cash or ATM access. This card may not be used everywhere Debit Mastercard is accepted. The Commuter Check Prepaid Mastercard is issued by The Bancorp Bank pursuant to license by Mastercard International Incorporated. The Bancorp Bank; Member FDIC. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated. Commuter Benefit Solutions of 11

11 Ready to get started? Commuter Benefit Solutions makes complying with the New York City Transit Ordinance a snap! We can get you up and running in just 4 easy steps. 1. Get a quote. Give us a call at or fill out our contact form, and one of our wonderful team members will reach out to you. 2. Sign up and complete registration. Once our helpful sales team signs your company up, you complete the registration process on our online platform. 3. Upload your eligibility roster. Upload your list of employees into the system, so they can create their own accounts and start ordering their commuting products. Getting Started 4. Pass out our sign up guide. Our custom-made sign up guide takes you out of the mix by walking employees through creating their user accounts and selecting their monthly benefit elections. We also offer communications, welcome letters, and how-to-videos that will walk your employees through the registration and ordering process step-bystep. Click here to contact our sales team and comply with the NYC Transit Ordinance now! 11 of 11