• Employer Tax Incentives

      What is the Maryland Commuter Tax Credit?

      Maryland-based businesses can receive a tax credit of 50% of the cost for providing eligible commuter expenses for their employees. The maximum value of the tax credit is $100.00 per month, per employee. Any combination of benefits can be used, and employers can take this credit against the State Income Tax, the Financial Institution Tax, or the Insurance Premium Tax. These employer-provided commuting expenses qualify for the tax credit:

      Metrorail, Metrobus, MARC, and Ride On transit passes, tokens, fare cards provided free or at a reduced cost.

      Vanpools, seating eight or more adults, and provided by the employer. Van purchase and leases, fuel, insurance, safety, and equal-access upgrades can qualify for the tax credit if paid directly by the employer.

      Cash in lieu of parking or cash paid to employees in place of a parking subsidy.

      Telework program where a telework subsidy is provided to an employee to cover prorated costs associated with teleworking such as internet, computer equipment, telephone or sofware costs.

      Carpools where the employer provides a carpool subsidy to employees for two or more employees commuting and includes E-ZPass and toll fees, parking fees, and other costs associated with the carpool. Reimbursement for maintaining or purchasing a carpool vehicle is not an eligible expense.

      Active transportation program where an employer provides a subsidy to employees for bicycling, operating a scooter or walking to work.

      Multimodal last mile connection ride hailing reimbursement by an employer for employee connection from transit, carpool, vanpool and active transportation to the worksite.

      Click here for an easy one page summary on how to claim the tax credit.

      To learn more about the Maryland Tax Credit program and other programs, check out the Commuter Choice Maryland website.

      For Bethesda information, contact Kristen Blackmon for more information at KBlackmon@bethesda.org or 301-656-0868 ext. 119.

      Federal Tax Considerations

      Visit the IRS's Employer Tax Guide for Fringe Benefits to learn more about the ruling on pre-tax benefits. Further information on the tax code is available on the IRS website.