Robert Daniele, controller at Halo, 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 take advantage 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 last year 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.
And 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.
On Jan. 1, 2009, some of those bicycle commuters will be 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 on Oct. 8, a bicycle commuting account was added to tax code Section 132. Next year, workers will be able to 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 vanpool other days are able to claim all those pretax benefits in the same month, that'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 ($1,440 for annual transit costs and $2,760 for a year's parking expenses).
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 next year. Then, if there is a large enough demand from bicycle commuters, they plan to seek an increase in the commuter savings account amount.
Freelance writer Kay Bell writes Bankrate's tax stories from her Austin, Texas, home. She also writes two tax blogs, Bankrate's Eye on the IRS, and Don't Mess With Taxes.