Even when you love your job, you probably don’t like getting to it much of the time. There’s the time on the road, the traffic jams and occasional accidents, not to mention the cost of gasoline.

Mass transit has its hassles too crowded trains, waiting for a bus in the rain, and in some cases, it takes longer than driving because you have to make all sorts of connections.

Your boss can’t do much about your actual commuting obstacles, but some companies are making workers’ treks to the office a bit more tolerable by providing a tax-saving way to cover part of the transportation costs.

These workplaces offer their employees a benefit known as a Qualified Transportation Benefit, or QTB. They also are sometimes called a Commuter Savings Account, or CSA, or a Commuter Expense Reimbursement Account, or CERA.

Regardless of what you call them, they work the same. You contribute to a workplace account and then use that money to pay for public transportation and parking expenses that you incur getting to and from work.

The best part about these accounts is that your money goes into them before payroll taxes are computed. That then cuts your tax bill somewhat while helping you put away money you would spend on commuting anyway.

Here’s a look at how one hypothetical commuter saves with a QTB account.

2008 tax savings with a workplace transportation account
With an account Without an account
Taxable income $40,000 $40,000
Less contributions of $110 per month $1,320 $0
Result in taxable income after contributions $38,680 $40,000
Less federal income and Social Security taxes withheld $9,053 $9,484
Results in net income $29,627 $30,516
Less commuting costs paid outside of transportation account $0 $1,200
Results in spendable income $29,627 $29,316
Tax savings $431 $0
Source: SHPS Holdings Inc., a health care and employee benefits outsourcing provider based in Louisville, Ky.

In addition to saving on federal taxes, depending on your state’s tax laws, you may also avoid state and local income taxes on contributions to your commuter account.

2 types of accounts

There are two basic ways to get to work, by vehicle or by mass transit. The tax code rules governing transportation benefits allow you to put money aside in separate accounts to pay for both commuting methods.

Workers are allowed to contribute to one account to pay for parking the vehicle they drive work. They are also allowed to contribute to another account to cover mass transit costs. While the 2008 commuter in the example above put $110 a month into one transportation account, that’s only about a third of the amount of money commuters could set aside per year to pay for bus and train transit passes, as well as van pool costs.

If you drove your own car to work or to a mass transit station in 2008, you were able to put up to $220 a month into a separate parking account. You could have used the money in that account to pay parking fees at train and bus stations or even for spots at or near your office.

The benefit is even better this year. Beginning in March, the combined transportation benefit maximum for the two accounts increases to $460, or $230 in each account.

The increase in the benefit maximum is due to a new provision in the American Recovery and Reinvestment Act of 2009, better known as the Obama stimulus plan, which was signed into law on Feb. 17. On March 1, the mass transit account limit will be the same — $230 a month — as the parking account. This larger commuter account limit will be in effect through 2010 with an inflation adjustment.

Previously, workers were allowed to put more money into the parking account, which some mass transit advocates saw as giving an edge to drivers. The change evens the playing field for all commuters.

Many companies establish the accounts so they can provide the transit passes or vouchers directly to employees or give them a debit card to use toward eligible fares. Cash reimbursement is allowed if the reimbursement is for a mass transit fare that is not readily available for direct distribution to employees.

Account limits, advantages

The funds, however, cannot be commingled. The accounts and the contributions to them must be kept separate.

You can’t transfer money between accounts or use excess money in one to pay costs that are attributable to the other.

The accounts do have one advantage over other similar workplace spending plans. At the end of the benefit year, any money still in a transportation account, either parking or mass transit, can be rolled into next year’s account.

Also differentiating commuter savings plans from other more commonly offered workplace benefits is their place in the tax code.

Internal Revenue Code Section 132 deals with transportation benefits, while workplace cafeteria plan benefits (health care, flexible spending accounts, etc.) are governed by Section 125. That’s why your employer may offer many typical benefits but not transportation accounts.

If a commuter benefit is offered, it has a separate enrollment procedure. Some companies that handle workplace benefits for employers, however, often help coordinate all the firms’ employee benefits.

Gasoline, environmental concerns

The commuter account concept started in 1987 with the creation of TransitCenter, a nonprofit organization that promotes mass transit use via transit benefits. Its founder, president and CEO Larry Filler, says that there is growing interest in commuting alternatives.

Because of the cost of gasoline, more workers are looking at mass transit. Environmental issues also are a consideration. “There’s a real connection between using [mass] transit and reducing greenhouse gasses,” says Filler.

The mass transit component, however, works better in some areas than others.

“[Mass] transit availability is not uniform across the country,” says Filler. “So this typically tends to be of greater appeal to metropolitan areas where employees have numerous alternative transportation options.”

The Halo Group, a brand development agency, and Clarendon Insurance Group are prototypical companies that provide the transit benefits to their employees. Both are in Manhattan.

Denise Goodwin Pace, co-founder and chief communications officer of The Halo Group, says the firm began offering transit benefits three years ago when it moved to the city. “We wanted to keep our employees happy,” says Pace. “It pays off for the company in low turnover, and it obviously keeps our workers happy because it helps pay for commuting costs and is a tax benefit for them.”

Robert Daniele, controller at The Halo Group, says 29 of the company’s 30 employees use the benefit, which is provided through TransitCenter’s TransitChek vouchers, metro cards and debit cards. “The one who doesn’t use it walks to work,” says Daniele.

All of the employees at Clarendon Insurance Group’s New York City headquarters make use of the company’s transit account option. It’s mandatory, says Helga Selke-Dunn, senior vice president and chief administrative officer.

“It’s a very welcome benefit, especially with train tickets being increased year over year and subway fare hikes,” says Selke-Dunn. “The philosophy of employees when they use the transit card is, ‘Oh, my transportation is free, so that’s something that I don’t have to budget for.'”

It’s not quite a “free” ride for Selke-Dunn, but she still welcomes the transit benefit. The train ride from her New Jersey home to her New York City office costs, she says, “well over $300 a month. However, this is a nice perk, getting $115 off.”

Room for growth

Will workplace-provided transportation benefits expand beyond large metropolitan areas such as New York? Filler believes so.

TransitChek’s 2007 commuter impact survey found that while just 31 percent of companies now offer this benefit, the program showed a 57 percent increase over 2006 participation.

“As gas prices stay high and there’s concern over environmental issues, companies and their employees will continue to look for alternatives,” says Filler.

A new addition to the company-provided transportation benefit menu also could help increase interest in alternative commuting.

Bicycle accounts on the way

Commuting by bicycle is becoming increasingly popular. According to data from the Bureau of Labor Statistics, around 650,000 people use a bicycle as their primary form of transportation to and from work.

Since Jan. 1, some of those bicycle commuters have been able to put a bit of pretax pay into a workplace account to help cover their two-wheel costs.

Thanks to a provision in the $700 billion economic stabilization and tax extenders law, also known as the financial services bailout bill, enacted Oct. 8, 2008, a bicycle commuting account was added to tax code Section 132. Workers now can set aside up to $20 per month in pretax earnings to help defray expenses related to bike commuting.

Expenses that qualify for reimbursement include such things as the purchase of a commuter bicycle, bike lock, helmet, bike parking and storage fees, shower facility costs and general maintenance of the bicycle that the employee regularly uses to get to and from work.

But there’s a catch. While commuters wishing to drive their vehicles some days and ride transit or van pool other days are able to claim all those pretax benefits in the same month, it’s not an option with the new bicycle benefit. Any month in which an employee claims the bicycle benefit, he cannot also claim mass transit or parking benefits.

And the bicycle commuting dollar amount, $240 a year maximum, is tiny compared to the other transportation accounts.

The smaller financial advantage, as well as the restrictions on using it in conjunction with other commuting benefits, could limit interest in bicycling accounts. Cycling advocates, however, are just glad to see the benefit finally make it into law after seven years of effort.

They are focusing on making sure the benefit is implemented smoothly this year. Then, if there is a large enough demand from bicycle commuters, they plan to seek an increase in the commuter savings account amount.

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