Mar 27 New Jersey Now Mandates Pre-tax Transit Benefits For Employees

New Jersey Governor Phil Murphy signed S1567 into law, requiring employers of 20 or more employees to offer a pre-tax transportation fringe benefit to their employees, covering commuter highway vehicle (vanpools) and mass transit costs. This mandate does not include parking.

The pre-tax benefit would allow employees to set aside a certain amount of pre-taxed income for transportation services to and from work.  New Jersey is the first state to mandate this benefit to employees.

Governor Murphy stated, “Providing this pre-tax benefit to commuters throughout our state will reduce the financial burden of fares and parking costs, resulting in significant savings.”

The new law will take effect on March 1, 2020, or the effective date of the regulations to be adopted by the New Jersey Department of Labor & Workforce Development – whichever is first.  Employers found noncompliant may be assessed a civil penalty of $100 to $250 for the first violation, and then an additional $250 penalty each additional 30-day period the employer is noncompliant.

The New Jersey Department of Labor and Workforce will adopt rules and regulations concerning the administration and enforcement of the pre-tax benefit.  Sax will continue to keep you updated as new details emerge.

For questions on this pre-tax benefit, and how it may impact your business, please contact a Sax Advisor at 973-472-6250 or www.saxllp.com.