The Chicago Transit Board today put its support behind a new program that will allow both companies and employees to take advantage of recent tax law changes designed to reduce commuting costs. The CTA's Transit Benefit Program encourages employers to make available to workers up to $65 a month in tax-free mass-transit benefits.
Effective June 1, 1999, the CTA's Transit Benefit Program is made possible due to changes in tax law that were a part of TEA-21, the transportation funding legislation passed during last year's Congress. Under previous law, employers could give their employees a similar amount for costs incurred by using transit but were responsible for the full cost of the benefit minus a tax deduction.
The new law allows participating businesses to purchase transit by using pre-tax income, a non-taxable subsidy that, for the employer, is tax-deductible, or a combination of the two up to a value of $65. Employees save in some cases nearly 40% of their transit costs by buying their CTA fare cards with pre-tax income. And the employer saves approximately 10% of what the employee set aside in payroll taxes per year. In addition, the program also provides a unique recruiting and retention tool while positively affecting the environment through the use of public transportation.
According to CTA Chairman Valerie B. Jarrett, "For all involved, the Transit Benefit Program is mutually beneficial. It also allows the CTA to further develop relationships with the business community in our service area."
Participating businesses can purchase Fare Cards in denominations of $30, $35, $60, or $65 and will receive the standard $1.00 bonus for every $10.00 spent on a Fare Card.
Currently $65 per month, the maximum allotment will increase to $100 per month in 2002.
CTA President Frank Kruesi said, "This program will mean substantially lower costs to many CTA customers. And there is a bonus to the CTA in that we get to introduce new riders to our quality transit services that can be their link between jobs and communities."
CTA officials said the new Transit Benefit Program builds on and complements the current RTA Transit Check Program.
Interested companies can purchase Transit Cards and Passes directly from the CTA by contacting the Transit Benefit Hotline at 312/664-7200, x8450.###