In a BLR webinar entitled "Mileage/Commuting Expenses: How to Avoid Big Mistakes With These Employee Expenses," Mark E. Tabakman, Esq., partner in the nationwide law firm Fox Rothschild, LLP and Stacy Wade, Ph.D., CPA, assistant professor of accounting at Western Kentucky University explained that, due largely to the weak economy (as well as concerns about reducing energy consumption, air pollution, and traffic congestion), more employers and employees are embracing commuting and ridesharing programs.
- For employers, commuting benefits reduce absenteeism, boost productivity, help with recruiting and retaining workers, and offer tax benefits.
- For employees, these programs save money on fuel (plus tolls and parking), reduce vehicle expenses, decrease commuting time, and offer (in some cases) a guaranteed ride home for employees who are parents or caregivers.
- The federal Transportation Equity Act for the 21st Century (TEA-21) offers payroll-related tax-favored benefits to employers to ease employees' commuting costs for ridesharing or mass transit.
- The TEA, through a provision in the Internal Revenue Service (IRS) Tax Code, allows employers to underwrite their employees' qualified transportation fringe benefits free from payroll taxes to the employer, and costs funded by the employer may also be deducted from the business's income taxes (IRC Sec. 132(f)).
Mark E. Tabakman, Esq., is a partner in the nationwide law firm Fox Rothschild, LLP (www.wagehourlaw.foxrothschild.com). He advises clients throughout the country on all aspects of labor relations and employment law, as well as the development of corporate employment policies. Stacy Wade, Ph.D., CPA, is assistant professor of accounting at Western Kentucky University (www.wku.edu). She teaches undergraduate and graduate courses in financial accounting and taxation.