The IRS has increased the limit for pre-tax transit benefits from $325/month to $340/month in 2026. This means more savings for businesses and employees!
What are pre-tax transit benefits?
The IRS tax code 132(f) allows companies to offer up to $340/month of tax-free commuter funds to each employee, either as an employer-paid subsidy or a pre-tax deduction from employees’ paychecks. This money can be used to cover the costs of commuting on public transit (including buses and vanpools) and qualified parking expenses, or both.
Employees can save up to 30% on their commuting cost using pre-tax transit benefits. Employers also benefit by saving up to 8% per participating employee through reduced payroll taxes, making pre-tax benefits a win-win.
How can my business utilize this limit increase? Call or email our team at 317-327-7433 or info@cirta.us