I was a little nervous to see what changes would come in the wake of the recent tax law overhaul (a.k.a. The Tax Cut and Jobs Act) signed in late December of 2017. It ends up there are some notable changes to the tax treatment of transportation benefits being offered by employers for the year 2018. We posted a summary of these changes last month, which you can see in our compliance update here. More details to come on those, so stay tuned.
One thing is for certain; you should review your commuter plan design – now. Start digging deeper and get creative. What feedback can you utilize to improve your program? Think about evaluating employee needs and satisfaction with their current and past transportation offerings.
A couple of pointers to get you started:
- Send out a survey to find out if employees prefer a debit card or pass fulfillment. You’d think that most folks prefer the convenience of having a pass delivered right to their door, but surprisingly I have found that most prefer the simplicity and flexibility of the debit card.
- Take your employees’ temperature on past commuter benefit changes. You can include this question in your survey, too. It’s been over a year since the IRS put the kibosh on reimbursements for cash purchases and we’ve heard a lot of grumbling from employees since then. Some participants actually liked being able to save up their dollars and claim a bulk reimbursement and some wanted to get the reward points on their credit card.
Despite the protests, commuter plans have become a great way for employers to offer another tax savings vehicle to their employees at very low administrative costs. Since unused funds contributed to commuter plans can carry forward indefinitely and contribution amounts can be modified as frequently as monthly, there’s no fear over a use-it-or-lose-it rule like there is with Flexible Spending Accounts.
If you don’t already have a plan in place, now is a good time to consider implementing one.