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EMPLOYER FAQ

What is RTD-IRA?
What are the benefits of RTD-IRA?
What are the relevant tax laws?
How much do employers and employees save?
Who can participate in the RTD-IRA program?
What does it cost?
Do I need to keep detailed records?
Will the program work with my payroll system?

What is RTD-IRA?
RTD’s Individual Rider Account (RTD-IRA) is an employer-sponsored transit benefit program offered by the Regional Transportation District (RTD). It was developed to provide the business community with a valuable employee benefit that helps companies and employees save money on taxes, reduce traffic congestion, improve the environment and promote transit use.

What are the benefits of RTD-IRA?
Employers that offer the RTD-IRA to their employees can save as much as $100 per participating employee per year on payroll taxes while providing a valuable employee benefit. Employees who sign up for the RTD-IRA can save up to $1,500 a year with the RTD-IRA pre-tax savings, transit pass discount and reduced commuting expenses.

Employers sensitive to tax savings, employee morale, improved recruitment and reduced turnover are ideal RTD-IRA participants. They find that the program enhances their benefits package without increasing overall compensation costs while demonstrating their concern for the environment.

RTD-IRA also increases employee awareness of transit options. Transit users have noted reduced stress from not driving, increased job satisfaction, improved on-time arrival and enhanced productivity.

What are the relevant tax laws?
Section 132 (f) of federal tax law encourages employers to assist with employee mass transit commuting costs by allowing tax-free subsidies of transit passes, tickets, tokens, etc. The maximum tax-free discount that can be provided is $105 per month.

How much do employers and employees save?
Employees and employers save all income taxes and payroll taxes on the amount of money provided for transit. Up to $105 a month ($1,260 a year) can be used for transit costs tax-free.

Employers that offer the RTD-IRA to their employees can save as much as $100 per participating employee per year on payroll taxes. This assumes a 30% tax bracket; Social Security (FICA) taxes paid by both employers and employees (7.65% of salary); and unemployment, disability, workman’s compensation and retirement costs driven by salary. These savings on payroll taxes are provided to all employers, including non-profit and public sector employers that do not pay income or FICA taxes. Click here for a tax savings worksheet.

Employees who sign up for the RTD-IRA can save up to $1,500 a year. They can save up to 30% on their pre-tax savings, an additional 10% on their RTD-IRA monthly transit pass, and $660* or more per year on reduced commuting expenses such as gasoline, auto maintenance and parking fees.

Who can participate in the RTD-IRA program?
All types of employers, from restaurants and hotels to small offices and large businesses with multiple locations, can participate in the RTD-IRA program. However, the employer must first enroll in the RTD-IRA program before employees can sign up for the RTD-IRA.

What does it cost?
There is no cost for employers or employees to join the RTD-IRA program. For the first 12 months of the program, we will provide transit benefits administration services to participating employers at no charge. We will provide the following services:

  • Sell RTD monthly transit passes to employees via online or by fax.
  • Mail RTD monthly passes directly to participating employees’ homes.
  • Send employer a payroll file with a list of passes (by type and cost) purchased each month by employee name and/or number.
  • Provide monthly program administration after employer does initial program set-up.
  • Post forms on the RTD-IRA web site, including Automatic Payroll Deduction and Direct Deposit forms allowing employer to deduct pre-tax funds to pay for transit passes and direct deposit a minimum of $25 per month into employees’ bank accounts.
  • Invoice employer for transit passes sold each month.

After the first 12 months of the program, participating employers can pay a small fee for transit benefits administrative services or become an RTD Pass Outlet and administer the program themselves.

Do I need to keep detailed records?
No complex record keeping is required. No special IRS reporting, such as W-2 or 1099 statements, is required. (If an employer wants to report pre-tax deductions on W-2s, box 14 can be used.)

Will the program work with my payroll system?
We adapt to the format required by the employer’s particular payroll system to facilitate the processing of all payroll deductions. To minimize discrepancies, we send an exception report to the employer electronically after the monthly order deadline has passed. Data discrepancies are given high priority and are resolved within 24 hours.

If you have additional questions about the RTD-IRA program, please contact an RTD sales representative at 303.299.2122 or via email at Contact Us.