The economic stimulus package appears to have sparked more employers offering tax-free commuter benefits, reports the TransitCenter, a non-profit group that promotes mass transit use.
In its 2009 Commuter Impact Survey, the organization reports a 35% increase in the number of employers with programs for tax-free commuter benefits since Congress passed the American Recovery and Reinvestment Act in February 2008.
Under the stimulus bill, employees can set aside up to $230 a month for commuting on public transportation and an additional $230 a month for parking costs. Before the law, the pretax cap on commuting expenses was $120 a month.
The survey also found employers with programs for tax-free commuter benefits cited cost savings for employees (62%) and enhancement of overall benefits offering (47%) as the main reasons for providing the benefits. Although gas prices have dropped since last summer, U.S. workers remain haunted by the record high prices. About 91% of employers noted that workers continue to express concern over gas prices, despite a leveling off of prices.
“Credit may be short, but companies are taking the long view when it comes to benefits and attracting and retaining talent,” says Larry Filler, president and CEO of TransitCenter. “These figures show that companies and commuters have responded quickly and in significant numbers to the expanded benefit. While we’re still tabulating the financial benefits to both employers and employees, the payoff in reduced carbon emissions, less traffic and better air quality will be significant,” he adds.
Other key findings in the study included:
- Flextime (33%), telecommuting (30%) and transit (30%) are the top commute-related benefits offered by the surveyed employers.
- Seventy-two percent of employers see tax-free commuter benefits as a way to help reduce their company’s carbon footprint.
- The new transit benefit cap resulted in 27% of companies seeing an increase in enrollments, 39% experiencing an increase in their employees’ pretax deductions, and 7% reporting an increase in the subsidized amount offered to employees.
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