Employers' Pensions and Benefits Administration Manual (EPBAM)



Information by Employer Task


The Commuter Tax$ave Program

The New Jersey State Employees Commuter Tax Savings Program (Commuter Tax$ave) is a benefit program authorized by Chapter 162, P.L. 2001 and available under Section 132(f) of the federal Internal Revenue Code.

This program allows eligible employees to set aside before-tax dollars to pay for certain mass transit and commuter parking expenses, thereby avoiding federal taxes and saving money. An eligible employee is any employee of the State; a State college or university; the State Library; or the New Jersey Commerce and Economic Growth Commission, Palisades Interstate Park Commission, New Jersey Building Authority, or Waterfront Commission of New York Harbor who is eligible to participate in the State Health Benefits Program, except those part-time employees made eligible under Chapter 172, P.L. 2003.

Commuter Tax$ave Component Plans

Commuter Tax$ave consists of two separate component plans. An eligible employee may elect to participate in any combination - both, one, or neither of the plans.

The two components of Commuter Tax$ave are for mass transit expenses and commuter parking expenses. Eligible employees may execute salary reduction agreements to have up to:

  • $230 per month ($2,760 per year) deducted from salary to pay for mass transit commutation costs to and from work (mass transit includes train, bus, ferry, and vanpool expenses);
  • and/or $230 per month ($2,760 per year) to pay for parking at work or at park and ride sites.

Pre-tax monies deducted from salary are not subject to federal income taxes, Social Security taxes, or Medicare taxes. There is a minimum deduction of $15 for either mass transit or parking deductions. There are no provisions for higher deductions on an after-tax basis.

Deductions may only be made for use with the employee's personal commuting costs for going to and from work. Deductions may not be made to pay for commuting costs of dependents. In addition, Internal Revenue Service rules require that mass transit benefits be delivered as tickets, payment cards, or vouchers that can only be used to purchase mass transit tickets. Parking benefits can be delivered as a payment card, voucher, or as a reimbursement of expenses

Fact Sheet #67, Commuter Tax$ave Program


































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Last Updated: December 18, 2007