Commuter Benefits Administrator, Clarity Benefit Solutions, Discusses the New Tax Reform Law and Commuting

NEW YORK, March 5, 2018 /PRNewswire-iReach/ -- Commuter benefits administrator, Clarity Benefit Solutions, discusses the new tax reform law and commuting.

Recently, President Trump signed a $1.5 trillion tax bill, which slashes the corporate rate from 37 percent to 21 percent and temporarily reduces the tax burden for most individuals. This bill could have an impact on companies that offer their employees commuter benefit plans.

Commuter benefit plans afford employers the opportunity to save significant money because they are exempt from federal income and payroll taxes. Originally established to encourage the use of public transportation, commuter benefits permit employers and employees to use pre-tax dollars to pay for a multitude of commuting expenses in the following ways: a pre-tax, employee-paid payroll deduction; a tax-free, employee-paid subsidy; or a combination of both methods.

With Trump's new Tax Cuts and Jobs Act in place, companies offering this pre-tax salary deduction for employees with commuter benefits means that they can no longer deduct the program as a business expense. Plus, they will continue to be taxed. This opens the possibility of fewer employers either decreasing commuter benefits or eliminating them entirely—shifting the burden of commuting back to the employees. Currently, the tax-excludable limit for transportation and parking expenses will be $260 per month, while the exclusion for biking expenses stays at $20, according to the IRS. However, commuters will still be able to subsidize trips on public transportation using pre-tax money through company-sponsored plans.

Data shows that nearly three-quarters of U.S. companies pay for some or all their employees' transportation—including incentives for car- or van-pooling, walking, biking, or public transportation.

Many in the industry believe that this law will have a negligible effect on commuter benefits plans since the corporate rate has been slashed. Commuter benefit programs also have benefits not widely known. They help preserve the environment by reducing the number of cars on the road—as well as the carbon footprint. And, employers who offer these benefits are forward-thinking and will stand out from their competition. This is an excellent method to attract—and retain—new talent!

About Clarity Benefit Solutions: Clarity Benefit Solutions provides technology that makes the health insurance plan selection process fast, easy, and straightforward. For over two decades, we have provided clients with industry-leading technology, compliance, and exceptional customer service. Our offering is designed to save time and lower the costs of managing benefits while also promoting employee self-service and automated ACA compliance.

Media Contact: Calvin Clark, Clarity Benefit Solutions, 7324288282, cclark@claritybenefitsolutions.com

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SOURCE Clarity Benefit Solutions



2018

Tags

Insurance, Human Resource & Workforce Management, Health Insurance



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