Commuter Tax Credit

Maryland-based businesses that provide commuter benefits for employees may be entitled to a tax credit for a portion of the amounts paid during the taxable year. Commuter benefits include certain costs for an employee's travel to and from home and the workplace, a Guaranteed Ride Home program or a parking "Cash-Out" program.

The credit may be taken against corporate income tax, personal income tax, state and local taxes withheld (for tax-exempt organizations) or insurance premiums tax. The same credit may not, however, be applied to more than one tax type.

To qualify for the credit:

The company must pay a portion of the cost of an employee's travel between the employee's home and workplace, including the purchase of transit instruments (tickets, passes, vouchers, fare cards, smart cards and tokens). In addition, the workplace must be located in Maryland and travel must take place in either:

A mass transit vehicle such as an MTA Bus, MTA Light Rail, MARC Train, WMATA Metrobus, WMATA Metrorail, or other qualified mass transit system;or
A van-pool which can seat at least 8 adults, is used primarily (80 percent of total annual mileage) to transport individuals between home and the workplace and is used primarily (80 percent of total annual mileage) to transport at least four employees per trip.

In addition, a business may also qualify for a credit for a portion of the cost paid to provide their employees a Guarenteed Ride Home and/or parking "Cash-Out" program.

Each tax year, before businesses file for the new Commuter Tax Credit against any of the applicable taxes, they must have a Commuter Tax Credit registration form on the MTA Marketing Department, 6 St. Paul St., Baltimore, MD 21202-1614 or online at www.commuterchoicemaryland.com.

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