Taxable Fringe Benefits
All financial incentives received from the Commuter Program (direct deposit or check) are considered taxable reportable income and will be reported to the State Controller's Office on a monthly basis. With exception are transit and vanpool subsidies up to $120 monthly (per Internal Revenue Code, Section 132 (f) employers may subsidize the cost ($120 per month maximum) of employees' commute to work by transit or vanpool only. Transit is defined as rail or bus).
Tax deductions will be reflected on employee payroll checks following the month the benefit was received. For example, rewards posted on April 15th will be taxed on the May paycheck. Taxes are based on a "flat tax rate" at 40.65%. The break down is as follows:
Frequently Asked Questions
Why are our commuter dollars being taxed?
CSUF has implemented taxable fringe benefits as mandated by Federal taxing guidelines, via the Chancellor's Office Technical Letter . The only qualified transportation fringe benefit that is not taxed is transit and vanpooling. Employees who commute by rail, bus or vanpool can receive financial benefits up to $120 maximum per month.
40.65% tax rate is so high!!
40.65% is a "flat tax" rate as indicated above. Keep in mind that at the end of the year your individual tax bracket may be lower, and you may get a return on the amount that is taxed. Check with your professional tax representative for details.
Are the commuter rewards no longer going into our Titan Card account, but onto our paychecks?
Commuter Rewards are disbursed monthly in the form of a check or direct deposit. The tax adjustment will be deducted from your paycheck.
If I earn 20 commuter reward dollars, after taxes, how much will I actually receive?
After the $20 is posted on to your account, a report is sent to the State Controller's Office via payroll. The appropriate taxes will then be deducted on your following payroll check. See the below estimates:
|Sample||Posted financial incentive||Flat Tax Rate||Deduction reflected on paycheck||Financial incentive Net|
|Commuter Rewards||$ 4.00||40.65%||$ 1.63||$ 2.37|
|Commuter Rewards||$ 10.00||40.65%||$ 4.07||$ 5.94|
|Commuter Rewards||$ 20.00||40.65%||$ 8.13||$ 11.87|
Since we are paying taxes in cash, can we get actual cash instead of being limited to on-campus purchases?
The Commuter Reward process will not change. We will continue to post commuter rewards in the form of a check or direct deposit. We have invested a lot of time and effort into developing this streamlined system.
Do I have to accept commuter rewards? I do not want to deal with the tax issue, but I still want to participate in the Commuter Program as you offer other benefits such as carpool parking, guaranteed return trip and rideshare permits.
Tracking forms are required in order to maintain eligibility and receive other commuter program benefits. Participants have the option to decline commuter rewards on a monthly basis. Revised tracking forms come with a "decline rewards" box.
Now that my commuter rewards have been reduced, why should I stay in your program?
We realize that these deductions may have a negative effect on the Commuter Program. However, the positives are far greater. Improving air quality is a big plus in itself. The ability to reduce the wear and tear of your vehicle, reduce time and stress spent on traffic congestion, and reduce the time spent dealing with the parking demand on campus is another major plus. Other positive benefits include:
- Reduce fuel, maintenance and parking costs.
- Preferential access to freeways and bridges, and use of special high-occupancy vehicle (HOV) lanes.
- Preferential carpool parking
- Time to read, sleep, or work during the commute.
- Flexible options - you can carpool one day a week or five
Walkers & Cyclist:
- Walking and bicycling are healthy and inexpensive commute options.
- Save time over driving, if you also consider finding a place to park and walking from the parking lot to your employer
- Free parking during inclement weather days
What programs do you have that are not taxed?
Bus & Rail - Tax Free!
- The E-Pass program was designed to get you to campus and back without the hassle. It is available to all CSUF faculty and staff with a valid Titan Card. Just swipe your E-Pass card through the farebox inside the bus, and your fare is automatically paid on all local routes. It’s easy. It’s convenient. And best of all, it’s FREE.
- Rail participants who do not own a parking permit receive a 100% reimbursement (up to $120) from their monthly rail cost. Participants who own a parking permit receive 25% reimbursement (up to $30).