Commuter Benefits in 2016 – Is Your Business Ready?

The New Year in New York City brings with it some changes that many employers need to be prepared for. As of January 1, 2016, Local Law No. 53 also known as the “Commuter Benefits” law goes into effect.   Passed in 2014 and drafted in accordance with federal regulations, the law requires for-profit or nonprofit employers with twenty (20) or more full-time, non-union employees to offer a commuter benefit program that grants the employee the option to use up to a $130 per month of pre-tax income for qualified transportation. Designed to benefit employers by reducing payroll taxes and benefit employees by lowering monthly expenses through the use of pre-tax income, employers can use a third-party to administer the program or can choose to do it in-house. In either scenario, and in order to avoid potential employer penalties for non-compliance, as well as the varying tax implications created by compliance, employers should discuss the new law with their legal and tax advisors.