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Transit Amendment to the Washington DC Clean And Affordable Energy Act

Effective January 1, 2016, the District of Columbia requires certain employers to offer qualified transportation benefits. The move by the city government makes transit benefits available to employees at companies with 20 or more employees. The mayor and council hope this legislation will encourage more people to use mass transit and help relieve congested roads and highways in and around the nation’s capital.

Covered employers must provide at least one of three transit benefit programs to its employees.

  1. A pre-tax election transportation fringe benefits program that provides commuter highway vehicle, transit, or bicycling benefits consistent with Section 132(f)(1)(A),(B) and (D) of the Internal Revenue Code at benefit levels at least equal to the maximum amount that may be deducted for those programs from an employee’s gross income pursuant to Section 132(f)(2) of the Internal Revenue Code;
  2. An employer-paid benefit program whereby the employer supplies, at the election of the employee, a transit pass for the public transit system requested by each covered employee or reimbursement of vanpool or bicycling costs in an amount at least equal to the purchase price of a transit pass for an equivalent trip on a public transit system; or
  3. Employer-provided transportation, at no cost to the covered employee, in a vanpool or bus operated by or for the employer.

Covered employers who fail to offer at least one transportation benefit program can be subject to civil fines and penalties.

Employers who offer commuter benefits encourage more people to use public transportation, thereby reducing road congestion and lessening carbon emissions while lowering employees’ and employers’ payroll taxes. Pre-tax commuter accounts also help companies recruit and retain happy, healthy, and productive employees.

To find out how much employees can save, visit the WageWorks Commuter Savings Calculator.

Contact WageWorks at 1-888-896-CHEK (2435) to learn about pre-tax transit benefits programs for your company.

Click here for a downloadable copy of this report.