Starting on January, 1 2016 New York City employers with 20 or more full-time employees will be required to offer pre-tax transit benefits to their employees.

The Affordable Transit Act was signed into law by New York City Mayor Bill de Blasio at the end of 2014 and is designed to ease public transit costs for hundreds of thousands of New Yorkers.

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Employers are expected to save more than $100 per year, per employee in tax liabilities under this new legislation while New York City transit riders will be able to put aside $130 in pre-tax earnings each month, averaging a savings of over $400 a year on Metro Card expenses.

Employers will not be subject to penalties prior to July 1, 2016 allowing sufficient time to make adjustments for the new law, keeping the following in mind:

  • First time violation penalties of the Act are between $100 and $250
  • Repeat violation penalties are $250
  • Prior to any civil penalties being imposed, employers have 90 days to cure the first violation and an employer will not have a penalty imposed on them more than once in any 30-day period.

If you don’t already offer transit benefits such as a commuter reimbursement account to your employees, Paypro can assist you with easily and quickly setting up such a program. Not only will it help your organization with any compliance violations, it will also make commuting in New York City a little less stressful for your staff, which in turn helps them be more productive and feel better about the place they work!