Once again there are new laws effective January 1, 2016 for all business with 20 or more employees located inside NYC.
Twenty (20) employees includes full time employees only. For this NYC commuter benefits law, a full time employee is defined as working 30 hours per week.
The new law allows employers to pay employees for regular commuting [subway, trains, busses, water taxi, van pools and access-a-ride] as a pre-tax deduction.
What’s more, the employers HAVE to offer it. And the employers have to retain proof for 2 years that the offer was made, should the employee decline.
The maximum an employer can pay pre-tax for an employee’s commute is $130.
If one thought NYC is aware that large amounts of workers commute from Long Island, Westchester, Connecticut and New Jersey, one would find this law doesn’t really accommodate them for their commute. [The law falls short of a LIRR commuter pass $338; Amtrak and others]
This is another burden put on nyc employers. The law itself can help those New Yorkers with inexpensive commutes and also reduces taxes to employers in most cases. The problem is the law includes burdensome record keeping for no reason. Also the law could have been written to extend to all employees and their commuting. Clearly the legislature didn’t want to help everyone.
This law mirrors the IRS new law of $130 for commuting pre-tax reimbursements. Only the IRS law also allows up to $250 for parking. NYC does not allow parking as a pre-tax deduction; so employers offering that to employees now have a NYC add back to their business returns.
Harlan S. Kahn CPA
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