EMPLOYER SAVINGS
With the RTD-IRA, your company can take a transit tax break and enjoy hundreds — even thousands — of dollars in savings!
Here’s how it works:
• Save up to $100 per employee per year in payroll taxes.
Federal legislation allows companies that participate in an employer-sponsored transit-benefit program — such as the RTD-IRA — to save up to 7.65% on their payroll taxes (FICA). That savings can add up to as much as $100 per employee per year.
Tax code information on RTD-IRA
The RTD-IRA is considered a “Qualified Transportation Fringe Benefit” governed by 26 USC Section 132(f). The law allows employers to give employees up to $1,260 per year as a pre-tax payroll deduction. Any expenses associated with the program are also fully deductible by employers. In January 2001, the IRS issued final regulations on Qualified Transportation Fringe Benefits. This describes how these benefits can be excluded from employees’ gross income, whether provided as a benefit or pre-tax deduction. In addition to explanation of the regulations, there is a Q&A section that provides definitions, details on limitations and further program guidance. The regulations can be found in Federal Register/ Vol. 66, No. 8/ Thursday, January 11, 2001/ Rules and Regulations - Pages 2241-2251, or by downloading it as a PDF file (requires Adobe Acrobat Reader).
Click here for Tax Code Cautionary Notice
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