Pretax Commuter Benefit Program Required by Seattle Employers

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October 04, 2018
Pretax Commuter Benefit Program
Must be in place by no later than July 1, 2019  - T
his legislation was passed by full council on 10/1/18.
 
Legislation Title:   AN ORDINANCE relating to employment in Seattle; requiring certain employers to offer employees the opportunity to use pre-tax earnings to purchase commuter benefits, other than parking, in accordance with federal law; adding a new Chapter 14.30 to the Seattle Municipal Code (SMC); and amending Sections 3.15.000 and 6.208.020 of the SMC.
 
2. Summary and background of the Legislation:  This legislation requires certain employers to offer a pre-tax commuter benefit program to their employees.  A pre-tax commuter benefit program, as authorized under Internal Revenue Code section 132(f), allows employees to allocate up to $255 per month from their paycheck for buses, light rail, ferry, water taxi, and vanpool commuting, and excludes these expenses from federal income tax and federal payroll tax.  An employee’s participation in such a program is voluntary. This legislation covers employers with 20 or more employees, and requires that the pretax commuter benefit program be in place by no later than July 1, 2019.  The legislation excludes governmental entities and tax-exempt organizations which would not qualify for payroll tax relief under the Internal Revenue Code.  The legislation includes a provision that fully- or partially-subsidized, employer-provided, transit passes satisfy the requirements of the legislation.  The legislation establishes enforcement powers that would become effective on July 1, 2020.
 
 
Seattle Times Article: https://www.seattletimes.com/seattle-news/politics/seattle-could-require-businesses-to-let-workers-pay-for-transit-with-pretax-wages/
 
City Council Minutes: http://seattle.legistar.com/MeetingDetail.aspx?ID=640704&GUID=9702C64D-318A-4CA4-9E19-B875F9E3304C&Options=&Search=
 
Council Bill: http://seattle.legistar.com/LegislationDetail.aspx?ID=3595664&GUID=66D370CF-D456-4039-BCB9-8D773243C808&Options=&Search=