Use Pre-Tax Commuter Benefits to Catch an Uber Ride

Uber Commuter Tax Break - Commuter Benefits Image

While it’s not “Carpool Karaoke,” these pre-tax commuter savings are certainly worth singing about.

Uber has extended its uberPOOL program—which allows riders to use their commuter benefits debit card to pay for shared rides to and from work—to more than a dozen major cities, with an even better range of providers, including our own partner, Edenred.

This means the Commuter Check MasterCard you use through ConnectYourCare can now be tied directly to an Uber account!

The uberPOOL program is the latest initiative to promote a greater awareness of significant tax savings available to commuters using public transportation to get to work.

Making the Most of Pre-Tax Commuter Benefits

Commuter benefits can potentially save employees more than $1,300 per year (assuming a combined tax rate of 30%).

When employees don’t pay income or FICA taxes on these expenses, the savings really add up. Moreover, employers can save up to 7.65% on their payroll taxes as employees use pre-tax dollars to cover their commuting expenses.

Specifically, the tax-free commuter benefit, also known as “qualified transportation fringes,” stems from IRS Section 132(f), which also includes parking, vanpools and even biking, as parking and public transit fees continue to rise in most cities.

The IRS recently set the maximum contribution limit for pre-tax transit commuting benefits to $255 for 2017.

Commuters can now apply this total contribution towards uberPOOL rides.

How uberPOOL Works

Eligible commuter benefit cards currently work for uberPOOL riders in the following cities: New York City, Boston, Chicago, Washington, D.C., San Francisco, Philadelphia, Las Vegas, Denver, Atlanta, Miami, Los Angeles, San Diego, Seattle and the entire State of New Jersey.

uberPOOL is an economy-based ride-share program, matching commuters with others riders heading in the same direction, so they can split the cost.

According to Uber, uberPOOL is always cheaper than uberX — up to 55% cheaper in some cities.

To use the uberPOOL, commuters will need to download the Uber app and create a free registration.

uberPOOL is listed under the “Economy” section of the app. Commuters can select “POOL” to learn how much a specific pool-based ride costs, compared to other options.

Upon selecting a ride, a commuter may get matched with other riders traveling the same way.

While that may not always be the case and the ride may not be shared (if there’s no match) a commuter will always pay the upfront fare displayed in the app.

> Next Steps: Interested in learning more about commuter benefits? Check out our Transportation Accounts page.

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Written by Jamie Janvier; published in Commuter Benefits category

ConnectYourCare does not provide tax or legal advice. This information is not intended and should not be taken as tax or legal advice. Any tax or legal information in this notice is merely a summary of ConnectYourCare’s understanding and interpretation of some of the current tax regulations and is not exhaustive. You should consult your tax advisor or legal counsel for advice and information concerning your particular situation before making any decisions.