Peter Jarausch, an engineer at Winzler & Kelly Consulting Engineers in Eureka, uses commuter checks to buy transit tickets, allowing him to apply his pre-tax earnings to commute expenses. Peter says he’s “happy to save money and support local transit at the same time.” Plus, he adds, “Commuter checks are really easy.”

Commuter benefits are IRS-speak for when an employer offers transit passes or tickets as a pre-tax benefit for employees. One common approach is for an employer to offer their employees the option of deducting an amount from their paycheck to be applied to the purchase of transit passes or tickets. Both parties win: the employee saves on their income taxes and the the employer reduces their payroll taxes, worker’s compensation costs, and the expense of providing parking.

HTA’s friendly and helpful reception manager, Consuelo Espinosa, redeems a few of Peter’s commuter checks (pictured below) for two 10-ride passes.

The savings can add up. For example a typical combined federal and California state household income tax rate is about 34%. At this tax rate, if you were to spend $600/year on monthly transit passes, you would save $204/year by applying your pre-tax earnings for transit expenses.

Jarausch estimates that he saves $1,688 annually by using commuter checks for transit and riding his bike to work. This estimate uses the IRS’s estimated driving cost of 48.5¢ per-mile.

There are a few different approaches for taking advantage of commuter benefits. One is for an employer to purchase transit books and/or passes and disperse them directly to employees. Another option is to use “commuter checks” issued by companies that specialize in administering commuter benefit programs.

Commuter check programs allow employees to order checks through a website. These checks, which can only be used for transit services are redeemed at the transit agency’s office. The programs helps to make record keeping and administration easy for the employer. Says Jarausch, “I just use the commuter check program’s website to tell them how much I need every month. All the necessary accounting and record-keeping is taken care of for me and my employer.”

Humboldt Transit Authority (HTA) just started receiving commuter checks in June. “People think of commuter benefits more as a big-city thing,” said Greg Pratt, Operations Manager for HTA, “but there’s no reason not to take advantage of them in Humboldt County.” Humboldt Transit Authority redeems commuter checks for Redwood Transit System and Eureka Transit Service. Arcata & Mad River Transit System redeems commuter checks at the Arcata Intermodal Transit Facility.

Employers and employees can learn more about commuter benefits opportunities and how to take advantage of them at Humboldt Transit Authority's webpage on the subject.