New Jersey: Commuters, Rejoice – Certain Employers to Provide Transportation Tax Benefit

Senate Bill 1567 was signed into law on March 1, 2019, and requires covered employers to provide pre-tax transportation fringe benefits to employees.  With the new law, employees will be able to set aside and utilize a pre-tax portion of their wages for specified transportation services.  This requirement goes into effect either March 1, 2020, or the effective date of rules and regulations adopted by the Commission of Labor and Workforce Development (CLWD), whichever is earlier.

The new commuter benefits law allows employees to use pre-tax dollars to purchase eligible transportation services, such as transit passes and commuter highway vehicle transfer.  However, this benefit does not apply to employees subject to a collective bargaining agreement.

The CLWD is expected to consult with local transit agencies and third-party transit benefit providers to develop rules and regulations for administration and enforcement of the new law.