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CTA / Ventra Transit Benefit Program

Did you know that Transit Benefits can save money for both employees and employers? The Transit Benefit program allows employees to pay for transit through pretax dollars. Savings from Transit Benefits can be significant, and participating is easy for everyone.
 


For the Employee:

Would you like to save up to $1,000 a year? Using Ventra’s pre-tax transit benefit program can save you up to 40% on your commuting! Contact your Human Resources department to learn more about this great program!

 

For the Employer:

Ventra’s pre-tax transit benefit program is a great way to extend a money-saving benefit to your employees at no cost to you. Employees who participate in the CTA / Ventra Transit Benefit program don’t have to pay income taxes on the pretax income they set aside for their commute, saving up to 40% or $24.40 per month for each employee on their commuting expenses, and employers can save on FICA and unemployment tax – almost 8%! Ventra’s pre-tax transit benefits program is offered free of charge (unlike other Third Party Administrators), and can be used to fund transit on CTA, Pace and Metra (through the Ventra app).

 

What are Transit Benefits?

The IRS created a program to extend tax-free benefits to assist with employee’s commuting costs.

 

How It Works

Employers have the option of subsidizing employees' transit costs at a level of their choice, or designating a portion of an employee’s pretax income to pay for transit. The outcome is a reduction of taxes for employees and employers, regardless of the level of subsidization by the employer.

Simply go to ventrachicago.com/transitbenefits and fill out a simple online enrollment form, provide funding information, and you’re on your way!

Transit benefits are considered tax-free benefits, not employee wages, so your company can save, on average, 7.65% in payroll taxes.

Benefits


Employer Benefits
  • Provide tax savings for employers (up to 8% of what employees spend on transit)
  • Is easily managed via online tool
  • Can serve as a recruiting tool
  • Improve morale and reduce absenteeism
  • Increase productivity
  • Have a positive environmental impact
     
Employee Benefits
  • Provide tax savings for employees (up to 40% of their transit costs)
  • Reduce employee commuting costs
  • Reduce car costs (gas, wear and tear, insurance, etc.)
  • Reduces the stress of driving and finding parking by making riding public transportation easier
  • Have a positive environmental impact
     

 

The Transit Benefit Program is an employee benefit program administered by employers. It allows employees to pay for their transit rides using pre-tax dollars – up to $255 per month ($3,060/year).

The program is based on a federal tax law designed to encourage the use of public transit. An amendment enacted under the Transportation Equity Act for the 21st Century (TEA-21) expanded the definition of the Qualified Transportation Fringe provision of the Internal Revenue Code, Section 132(f).

Because of the pretax nature of the program, savings for employees can be as much as 40 percent and employers can realize about an 8 percent payback.

A company can choose to offer a wide range of transit values or CTA and Pace 30 Day Passes. Employers have the option of subsidizing employees' transit costs at a level of their choice or not at all. The outcome is a reduction of taxes for employees and employers, regardless of the level of subsidization by the employer.

 

For more information contact us at tbenrollment@transitchicago.com or (312) 681-4005.

Additional info: CTA/Ventra Transit Benefit Program Packet for Employers

 

Frequently asked questions

Q: How many employees do I need to sign up for transit benefit?
A: There is no minimum. Your company can sign up for commuter benefit with just one employee.

Q: My employees use CTA, Pace and Metra. Can transit benefits help all of them?
A: Yes! Ventra transit benefits as well as Third Party Administrators (TPAs) offer solutions for use on CTA, Pace and Metra.

Q: What are the current monthly tax-free allowable limits?
A: With Transit Benefits employees can set aside up to $255 a month for transit/commuting use.

Q: What’s the difference between an employer subsidy and a pre-tax deduction?
A: An employer subsidy is an employer-paid benefit, whereas, a pre-tax deduction is a payroll deduction made by employees . Commuter benefits can be offered as either a subsidy, pre-tax payroll deduction or a combination of both.

Due to the tax advantages, offering the benefit as a subsidy is more cost effective when employers are considering giving an employee the equivalent raise in salary . For example, a monthly transit subsidy of $250 is roughly equivalent to a $406 pay raise which would be taxable income. A subsidy saves the employer on payroll taxes and the employee on having to pay additional taxes on a higher income. Pre-tax deductions must be tracked via your payroll system.

Even if your company offers a transit subsidy, your employees may still benefit from a pre-tax deduction. You can do either a subsidy or a pre-tax deduction, or a combination of the two, through Transit-Benefits programs.

Q: Can my employees get their benefits automatically each month?
A: Yes, employees can set up a recurring reorder of either Transit Value or CTA and Pace 30-Day Passes, or they can make periodic changes to or suspend their deductions.

Q: Do I need to keep detailed tax records?
A: No. Unlike Flexible Spending Accounts (FSAs), no complex record keeping is required for commuter benefits. There is no special IRS reporting, such as W-2 or 1099 statements .

Q: Do I have to wait for open enrollment to sign up for Ventra Transit Benefits or make changes?
A: No! Employers can sign up for Transit Benefits at any time and employees can make changes to their withholding at any time of the year.

Q: How long would it take to set up my company’s own Transit Benefit program?
A: Enrollment times vary with the transit benefit program you select. New accounts are typically ready to be used the following month.

Q: Can employees redeem commuter benefits for cash?
A: No.
 

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