News Release

Tax-free Accounts Help Commuters Cut Fares

December 17, 2004

Fares are rising for New York commuters but riders can lower their mass transit commuting costs by 30 to 40 percent by using tax-free transit accounts.

“Many people still aren’t taking advantage of tax laws that allow commuters to use pre-tax dollars to pay for mass transit fares and commuter parking,” says Tony DiBarnaba, president of Benefit Resource, Inc. “It’s unfortunate because the savings are significant.”

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Benefit Resource estimates that two-thirds of New York City area mass transit commuters are spending more than they have to for transit fares.

“I think people hear the words ‘tax-free account’ and think ‘paperwork,’ ” DiBarnaba says. “But now commuters can use the eTRAC® MasterCard® so there’s no paper, no vouchers, no reimbursement forms to fill out and – what may be the greatest convenience of all – it’s a debit card so there’s no need to handle cash when purchasing transit passes.”

Under IRC Section 132(f) Plans, also known as Qualified Transportation Fringe Benefit Plans, employees who work for participating companies can pay for qualified mass transit expenses on a tax-free basis. Employees make contributions to individual accounts and pay for eligible transportation and parking expenses with pre-tax dollars.

“Depending on their tax rate, most employees will realize a 30 to 40 percent savings when they use tax-free funds to pay for qualified transportation expenses,” says Tom Guiler, vice president of Benefit Resource. “An employee spending the maximum $105 a month (IRS maximum spending limit for 2005) in mass transit expenses will save $32 to $42 a month. Someone spending the maximum $200 for parking will save $60 to $80 a month. With rising fares, it’s more important than ever that consumers know about tax-free transportation accounts and that they contact their employers about participation.”

Under the law, qualified mass transit includes buses, trains, subways and van pools when these lines are used in connection with travel between an employee’s residence and place of employment. Qualified parking expenses cover parking at or near a commuter’s place of employment or at or near a mass transit center that a commuter uses to travel to work. Commuters can use their eTRAC cards at transit company kiosks and ticket windows or to participate in mail-and-ride programs. The eTRAC card is accepted at approved transit and parking vendors that accept MasterCard® debit cards throughout the country.

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Commuters can find out more about tax-free transportation accounts by visiting the Benefit Resource web site at www.BenefitResource.com.

Benefit Resource, Inc. administers tax-free benefits for more 100,000 employees at more than 900 companies in New York City, upstate New York, Boston, Chicago, Philadelphia and Washington, DC. Benefit Resource pioneered paperless transit programs and unlike payroll or human resource companies, Benefit Resource focuses solely on administration of tax-free benefits. When there’s a question about tax-free benefit plans – for health care, day care or transportation, Benefit Resource is the expert.

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