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Certain Illinois Employers Required to Offer Pre-Tax Commuter Benefits

The new Illinois Transportation Benefits Program Act, which takes effect on January 1, 2024, will require employers with at least 50 employees in certain geographic areas (located within one mile of a public transit stop in the Chicago metropolitan area) to offer pre-tax commuter benefits to “eligible employees” which are those who work an average of at least 35 hours per week on a full-time basis.

Pre-tax commuter benefits allow employees to use pre-tax dollars to purchase transit passes, vanpool passes, and qualified parking, which can save them a significant amount of money on their transportation costs. The law also affords employers with a number of tax benefits for providing this benefit to their employees.

Employers are not required to contribute to the cost of employees’ commuter benefits, but they are allowed to do so under federal tax laws.

Next Steps

To meet their obligation under the Act, covered employers will need to participate in one of the transit programs offered by either the Chicago Transit Authority (CTA) or the Regional Transportation Authority (RTA). For additional information on benefits setup, covered employers are encouraged to visit either of these websites.

HR Works, headquartered in Upstate New York, is a human resource management outsourcing and consulting firm serving clients throughout the United States for over thirty years. HR Works provides scalable strategic human resource management and consulting services, including: affirmative action programs; benefits administration outsourcing; HRIS self-service technology; full-time, part-time and interim on-site HR managers; HR audits; legally reviewed employee handbooks and supervisor manuals; talent management and recruiting services; and training of managers and HR professionals.