In June 1998, the Transportation Equity Act for the 21st Century (TEA 21) was signed into law. TEA 21 includes a provision amending the Internal Revenue Code (26 U.S.C. Section 132(f)). This amendment to the tax code allows employers to offer their employees public transportation benefits in addition to salary or wages, or allow the employee to elect to receive Metrochek as a pre-tax payroll deduction, or some combination of the two.

Federal legislation prohibits cash or paycheck reimbursements when voucher programs are available.

The federal tax code allows you, as an employer, to also provide your employees with up to $220 each month in tax-free or pre-tax benefits for parking in a Metro-operated lot. However, an average month should not exceed $90 in parking fees at Metro lots. CY 2008 New Benefit Values

Under federal tax laws, Metrochek/SmartBenefits® are available four ways. Many employers reap a 2-to-1 benefit. (Specific tax rules may vary according to state and type of enterprise.)

1. Direct employer paid benefit: Give an employee a direct benefit of up to $115 maximum per month ($1,380 per year). It’s tax-free to the employee, and if you’re a private sector employer, you can probably write off the cost of providing Metrochek/SmartBenefits as an ordinary expense.

2. Pre-tax salary deduction: By establishing a Metrochek/SmartBenefits® deduction program, employees can pay with pre-tax dollars through payroll deduction. The money withheld is completely exempt from state and local taxes. For each employee who receives the maximum of $1,380 per year, the savings is around $180 per year in FICA and unemployment insurance.

3. Combination: The employer provides part of the $115 benefit and allows employees the option to pay the balance from pre-tax income. The employer simply buys Metrochek/SmartBenefits® using the combined amount. Employees still save on payroll taxes.

4. As an incentive: Offer it as part of a salary increase, bonus, award or incentive. No matter how you offer it, Metrochek/SmartBenefits® is a powerful tool for helping employers recruit, retain and motivate employees.