IRS commuter benefits allow employees to set aside pre-tax dollars for eligible commuting costs, such as public transportation, vanpools, or parking. These benefits are offered through employer-sponsored plans and can help employees save money on their commuting expenses.
Under the Tax Cuts & Jobs Act, the maximum amount that employees can contribute to commuter benefits plans is $270 per month in 2023 and 2024, and $300 per month in 2025 and 2026. Employers may also contribute to these plans, but their contributions are not excludable from the employee’s income. Commuter benefits plans can be a valuable way for employees to save money on their commuting costs and reduce their taxable income.
