NYC’s Commuter Benefits Law takes effect on January 1, 2016. Under the law, all employers (corporations, LLCs, partnerships or sole proprietorships) with 20 or more full-time employees working in New York City must offer their employees the opportunity to use pre-tax income to pay for their transportation by public or privately owned mass transit or in a commuter highway vehicle. The law does not apply to any part-time employees.
Effective 1/1/2016, an employee can deduct up to $255.00 per month under Federal law for monthly transit expenses. Car pooling and qualified parking does not fall under the new law.
Employers must keep records unde the NYC Commuter Benefits Law that demonstrate that each eligible full-time employee was offered the opportunity to use pre-tax income to purchase transit benefits and indicate whether the employee accepted or declined the offer. Employers may use the form available on the DCA website at nyc.gov/commuterbenefits to document compliance. Records must be kept by the employer for a 2 year period.
Employers do have a six-month grace period to implement the benefit plan after which fines can be issued for $100 to $250 for the first violation if they do not cure the violation within 90 days. After this period, there may be an additional $250 fine for each 90 days the employer is not in compliance.
Additional information can be found at the NYC FAQ page for Commuter Benefits. For additional assistance in setting up a new business or having your existing business comply, please contact our offices at Polizzotto & Polizzotto, LLC