The Transit Ridership Incentive Program (TRIP) will provide up to $1,700 to Cook County businesses that enroll employees in a pre-tax transit benefit program. Commuters can save between 30 percent and 40 percent on their commuting costs by purchasing transit fares before taxes. The incentive program has $250,000 made available through the American Recovery and Reinvestment Act (ARRA), and the limited funds will be disbursed to employers on a first come, first served basis.
"With the rising cost of gas, public transportation is the most common-sense approach today. This latest initiative makes it easier and even more cost-effective to travel by bus or train," said Joe Costello, Regional Transportation Authority executive director. "Not to mention, by taking public transportation, you're contributing greatly to the reduction of pollutants and highway congestion, as well as showing a commitment to the sustainability of our environment."
Employees typically earn their income, are taxed and then purchase transit to get to work. Those enrolled in a pre-tax transit benefit program can purchase transit fare before being taxed, which lowers the amount of their taxable income. The transit program is not unlike making contributions to a 401(k) retirement plan. Depending on their transit costs and tax bracket, employees can lower their tax burden by hundreds of dollars per year.
In addition to saving people money, the program encourages people to commute via mass transit, which is typically cheaper and less polluting than driving. Transit riders can save significantly by using public transit instead of driving. Fares for the CTA, Metra, Pace, Amtrak and the Northern Indiana Commuter Transportation District are eligible for pre-tax purchase.
Pre-tax transit programs also benefit employers. Participating businesses reduce their payroll taxes by simply making the program available to employees. And, by enrolling in TRIP, employers will receive direct payouts that can total $1,700. Participating employers will receive:
- $10 per month ($30 for a three-month enrollment period) for each new employee (up to 50) who uses pre-tax transit benefits, totaling $1,500.
- An additional $200 when they introduce a pre-tax transit benefit program for the first time and enroll five or more employees.
"Pre-tax transit programs are a major benefit to employers and employees alike," said Jerry Roper, president and chief executive officer of the Chicagoland Chamber of Commerce. "Transit is one of our competitive edges here in Chicago because it allows us to move one million people to and from work efficiently. Tax-free transit encourages increased ridership, and today more than ever, transit is important to keeping our economy moving."
Funding for TRIP is made possible by ARRA through its Energy Efficiency and Community Block Grant program. The Cook County Department of Environmental Control is administering the program in coordination with the Center for Neighborhood Technology (CNT) and the Regional Transportation Authority.
"Families are pinching pennies wherever they can, and signing up for pre-tax transit benefits is a winner for commuters, it's a winner for employers, and it's a winner for the environment," said Jacky Grimshaw, CNT's vice president of Policy.
To learn more about this incentive program, visit www.lesstaxingcommute.com.