Commuter Benefits are employee-funded accounts for either parking or transit, regulated by the IRS, that allow participants to set aside pre-tax funds to save on work-related commuting expenses.The IRS sets an annual monthly maximum, which is $300 per month for transit and $300 per month for parking (2023). Elections can be changed monthly, depending on personal use of the benefit. MyChoice Accounts provides a convenient debit card to pay for work-related commuting expenses.
The key benefit is tax savings. An average daily commuter in New York City can save up to $700 per year by electing commuter benefits*. If you have the option to use mass transit, you can save yourself time, money, hassle and personal vehicle expenses by commuting to work with others. In addition to all that savings, you’re also saving the earth by reducing your greenhouse gas emissions with regular use of mass transit.
|Without Commuter Benefits|
|Gross Annual Pay||$60,000|
|Estimated Tax Rate (22%)||-$13,200|
|Net annual pay||=$46,800|
|Estimated annual commuting expenses||-$7,200|
|Final annual pay||=$39,600|
|With Commuter Benefits|
|Gross Annual Pay||$60,000|
|Maximum annual commuter account contributions||($300/month transit + $300/month parking x 12 months) = $7,200|
|Adjusted gross annual pay||=$52,800|
|Estimated Tax Rate (22%)||-$11,616|
|Final annual pay||=$41,184|
*Estimated employee savings are for informational purposes only and based on the 2023 tax year. Individual savings may vary based upon income, individual tax rates, state of residence and other factors. Please consult your tax advisor.
When you sign up for the program, your employer will deduct the amount you choose from your pay on a pre-tax basis. You will receive your MyChoice Accounts Visa® card in the mail that can be used to purchase transit passes from your transit authority directly or pay for your vanpool, UberPool or Lyft Shared transportation costs.
The transit card has tight IRS regulations. The card can be set up as the funding source for most transit agency ‘smart cards’. This allows your transit pass to be automatically funded each month using the funds placed on your card. You may also purchase transit passes from credit card terminals that ONLY sell transit passes.
For example, if you are at the transit agency and purchase a pass at a kiosk, the card will work. If you are at the transit agency and go to a window where they sell items in addition to transit passes, the card will decline. No matter the type of transportation, a manual claim is not possible.
When you sign up for the program, your employer will deduct the amount you choose from your pay on a pre-tax basis. You will receive a MyChoice Accounts Visa® card in the mail that can be used to purchase parking from designated kiosks.
The parking card will only work at parking locations that have a credit card machine that has “Parking” for the Merchant Category Code (MCC). If for some reason you can’t use the card to pay for parking, you may file a claim through your online benefits portal or the MyChoice Mobile App to be reimbursed.
Auto-loading instructions and/or fare purchase information for transit authorities can be found at these links:
New York: MTA Easy Pay
Atlanta: MARTA Breeze Card
Seattle: SoundTransit ORCA Card
San Diego: MTS Compass Card
Houston: Metro Q Card
Minneapolis: MetroTransit Go-To Card