SmartBenefits Is Smart for Employers
Enroll in SmartBenefits to let your employees commute tax-free. Metro's SmartBenefits program is free of charge.
Top Five Reasons for Employers to Offer SmartBenefits
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Tax Advantage. For-profit employers cannot deduct qualified transportation fringe (commuter) benefits but can avoid about 11% in payroll taxes. Non-profits can deduct the benefit expense and avoid the related payroll taxes. For employees, the commuter benefits are completely tax-free. See the charts below. |
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Recruit, Retain and Motivate. Letting employees commute tax free with SmartBenefits can help make you a preferred employer. SmartBenefits can be used anywhere a SmarTrip card is accepted as well as on MARC, VRE, MTA Commuter Bus, MetroAccess and many vanpools. |
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No Fees to Participate! Every SmartBenefits dollar goes directly to your employees.
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Qualify for Regional Incentives. Maryland employers can save even more with Commuter Choice Maryland and the Montgomery County FareShare Program. Additionally, SmartBenefits Plu$50 is offered by Fairfax County and Loudoun County. |
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Comply with DC Law. DC employers with 20+ employees can use SmartBenefits to comply with DC's commuter benefits law and avoid fines (see Section 3302). |
Tax Advantages and the Law
Using SmartBenefits, employees can save nearly $1,800 in taxes annually. Employers can avoid payroll taxes on the amount of SmartBenefits provided as well as qualify for local incentives.
This chart/example reflects the savings for a roundtrip from Glenmont to downtown DC for employees who work a five-day week and park at the Glenmont Metrorail lot.
| Each Taxable Year | For-Profits, State, and Local Govt | ||
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Employee
SmartBenefits Savings |
Transit Only
$300 / Month |
Parking Only
$104 / Month |
Transit & Park
$384 / Month |
| Annual Benefit or Payroll Deduction | $3,600 | $1,250 | $4,850 |
| Federal Income Tax 22.00% | (790) | (280) | (1070) |
| FICA: Social Security 6.20% | (220) | (80) | (300) |
| FICA: Medicare 1.45% | (50) | (20) | (70) |
| State Income Tax 7.00% | (250) | (90) | (340) |
| EMPLOYEE TAX SAVINGS | $(1,310) | $(470) | $(1,780) |
| Net Cost to Employee | $2,290 | $780 | $3,070 |
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Employer SmartBenefits
Payroll Tax Reduction |
Transit Only
$300 / Month |
Parking Only
$104 / Month |
Transit & Park
$384 / Month |
| Annual Benefit or Payroll Deduction | $3,600 | $1,250 | $4,850 |
| FICA: Social Security Match 6.20% | (220) | (80) | (300) |
| FICA: Medicare Match 1.45% | (50) | (20) | (70) |
| Unemployment FUTA 0.60% | (20) | (10) | (30) |
| Unemployment SUTA 2.62% | (90) | (30) | (120) |
| EMPLOYER PAYROLL TAX REDUCTION | $(380) | $(140) | $(520) |
Non-profit employers enjoy the same tax advantages as for-profits, plus non-profits no longer have to pay unrelated business income tax on the benefits thanks to the 12/20/19 passage of H.R. 1865 (pg. 715). In other words, non-profits actually save money for each commuter benefit dollar.
For each taxable year, employers can exclude the value of transportation benefits provided to an employee from the employee's wages up to the following limits:
- $325 per month for combined commuter highway vehicle transportation and transit passes [including Metro's SmarTrip cards].
- $325 per month for qualified parking. 1
Maryland employers may also qualify for additional tax savings under the Commuter Choice Maryland Benefits Program and Montgomery County's FareShare Program.
1 The Transportation (Commuting) Benefits section of IRS Publication 15-B describes the qualified transportation benefits that employers may offer under the Internal Revenue Code (26 U.S.C. Section 132(f)).
Qualified transportation benefits include providing a transit pass benefit. The definition of a transit pass includes smart cards like Metro's SmarTrip card as described in
IRS Revenue Ruling 2014-32
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Considering a Third-Party Administrator?
- Third-party administrators charge a fee for their services. SmartBenefits is fee-free.
- SmartBenefits is managed locally by transit benefit experts.
- Some TPAs offer debit cards that let you transfer tax-advantaged funds directly to a SmarTrip card. In that case, the funds for transit and parking are commingled. Consult your tax advisor before deciding.
Get Started
Ready to open a SmartBenefits employer account? Submit an application and an account representative will get in touch with you. Remember, Metro does not charge a fee to participate in SmartBenefits, so there's no risk to apply.
SmartBenefits Employer Application
Employees may participate only after their employer has enrolled in SmartBenefits.
Have questions? Send an email to our SmartBenefits account team or call us at 202-962-2784.