Employer Transportation Benefits in The United States - Terminology

Terminology

• Transit Benefits: Same as commuter benefits but more specific to use of mass transit services such as commuter rail lines or buses.
• Qualified Transportation Fringes:' Used in tax legislation to refer to benefits for transit, vanpool, and qualified parking expenses.
• Commuter Highway Vehicle: a tax law term for vanpool as defined in section 132(f)(5)(B)
• Commuter Benefits: Refers to employer-provided benefits under section 132(f) of the tax code and covers tax-free transit, vanpool, or parking benefits.
• Fringe Benefit: An employment benefit (such as paid holiday time or gym membership) that has a monetary value but that does not affect an employee’s taxable gross income (As opposed to offering a benefit pretax, meaning an employee’s pretax deductions pay for the benefit and reduce taxable income).
• Fare Card: a general transportation industry term that refers to a card or ticket that a transit rider can use to ride on a public transit system.
• Transit Pass: defined by IRC section 132(f) as a means any pass, token, farecard, voucher or similar item used for transit.
• Transit: term used to refer to any form of rail, bus or ferry operated by a public or private entity.
• Tax-free: with reference to commuter benefits generally refers to an amount that for tax purposes is excludable from gross income. Can be either a fringe benefit (in addition to compensation) or pretax (in lieu of compensation).
• Pretax: payroll deductions made before tax liabilities are calculated.