New Illinois Commuter Benefits Law
Beginning January 1, 2024, many employers in the six-county Chicago area will need to provide their employees with pre-tax commuting benefits. The new Illinois law, the Transportation Benefits Program Act, applies to employers with at least 50 full-time employees in certain geographic areas, at an address located within one mile of a transit service location. The act requires employers to provide commuting employee benefits by law. Here are the geographic areas:
- All of Cook County; Warren & Grant Township in Lake County; Frankfort & Wheatland Township in Will County; Addison Township, Bloomingdale Township, York Township, Milton Township; Winfield Township; Downers Grove Township; Lisle Township; Naperville Township; Dundee Township; Elgin Township; St. Charles Township; Geneva Township; Batavia Township; Aurora Township; Zion Township; Benton Township; Waukegan Township; Avon Township; Libertyville Township; Shields Township; Vernon Township; West Deerfield Township; Deerfield Township; McHenry Township; Nunda Township; Algonquin Township; DuPage Township; Homer Township; Lockport Township; Plainfield Township; New Lenox Township; Joliet Township; or Troy Township
Below are answers to a few commonly asked questions about Surency Commuter Benefits.
What is a commuter benefits plan?
- A Commuter Benefits plan is a qualified transportation benefit program authorized by the IRS and provided by an employer. For Pre-Tax Benefit programs administered by Surency, qualified expenses are dictated by the IRS and Surency uses those guidelines in reviewing claims. Under a Commuter Benefits plan, members have a transit account, parking account, or both depending on what the employer chooses to offer.
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Qualified Transit expenses cover public transportation and vanpools carrying six or more adult passengers (excluding the driver). Any type of transit service, publicly or privately owned or operated, including bus, rail, subway, ferry, shuttle bus, and commuter highway vehicles under contract, which provides to the public and/or employees, general or special service on a regular and continuing basis is eligible.
- Qualified Parking expenses cover parking at or near work, or at or near a place where you take public transportation to work.
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How does the plan work?
- The member authorizes their employer to deduct a pre-tax amount for parking or van-pooling/transit from each paycheck, up to the IRS (monthly) limits. Pay for expenses with their Surency Benefits Card and the expense is automatically deducted from their Commuter Benefits Account. If a member's transit or parking authority does not accept your Surency Benefits Card for payment, you may file a claim for reimbursement.
What are the annual limits for commuter benefits?
- Annual limits are set by the IRS. The following limits are currently in effect for 2023 (indexed annually):
- Parking deduction is limited to $300 per month
- Transit passes & vanpooling (whether separately or combined) deduction is limited to $300 per month.
- Any monthly costs above these limits cannot be exempt from taxes and cannot be carried over to future months. Although these are the limits set by the IRS, the employer may choose to offer lesser amounts.
What are the claim(s) filing limits?
- Federal Regulations require claims to be filed and substantiated within 180 of incurring the expense. All claims filed after the 180 day window will be denied and funds will be forfeited.
Will the funds be forfeited at the end of the calendar year?
- Commuter Benefits are not tied to a benefit year, so the funds will remain in your account (funds rollover from month to month) until used or within 180 days (filing limit) after the services were provided. However, if employment ends, any money remaining in your account will be forfeited.
Does the Surency Benefits Card work with a Commuter Benefits plan?
- Yes! And if the employer already has a Surency plan, the member can use the same Benefits Card they are already using.
No part of this website is tax, financial, or legal advice. You should consult your own legal and tax advisers regarding your personal situation and whether this is the right program for you.