Out This option is meant to provide an additional financial incentive for employees to use alternate mode options. Any public or privately-owned or operated bus, rail, subway, shuttle bus service or vanpool that provides regular commute operations. All other employees in the vanpool are only eligible for the vanpool benefit because only one person can receive the parking benefit. However, employers can offer incentive programs, such as taxable subsidies, for those who walk, bike, or ride in a carpool. For transit and vanpools, it is important to keep records proving expenditures such as transit pass invoices from the local provider.
Employees can set aside some pre-tax income to pay for transit or eligible vanpools.
Therefore, employees save on payroll and income taxes and employers reduce payroll costs. Employers save on payroll related taxes. Employees save on federal income taxes.