IRS 132(f) Mass-Transit Benefits for SFSU Employees

Since 2001, IRS section 132(f) has allowed employers to provide to their employees a pre-tax salary deduction equal to the cost of their mass transit commute, up to $105/month. Allowable costs include public transit fares, vanpool fares, and BART parking.

SFSU provides employees with the other pre-tax benefit available in 132(f), pre-tax deductions for parking on campus, but does not provide 132(f) benefits to employees who use mass transit. The University is encouraging people to drive, rather than take public transportation.

If SFSU would implement 132(f), up to $105/month of employees mass transit costs could be classified as pre-tax income, saving each employee up to $750/year in taxes. This employee benefit would also provide a benefit to SFSU, as the University would save up to $96/year per employee from reduced Social Security and Medicare taxes.

IRS 132(f) allows pre-tax salary deductions for both parking and mass transit costs. Employees who currently purchase campus parking permits with pre-tax income would also be eligible to use pre-tax income for mass transit costs.

Implementing the IRS section 132(f) mass transit benefits would save employees money, save the University money, and encourage the use of mass transit.

We ask SFSU and the CSU to implement the mass transit benefits of IRS section 132(f).