WHAT IS THE MARYLAND COMMUTER TAX CREDIT?
Maryland employers, including 501 (c)(3) or (4) organizations, may claim a tax credit for 50% of the eligible costs of providing commuter benefits up to a maximum credit of $50.00 per participating employee per month. The tax credit can be taken against the personal income tax, the corporate income tax, or the insurance premium tax.
Non-profits may claim a tax credit by:
- Submitting an annual registration form to the MTA
- Setting up an account with the Comptroller of the Treasury
- Submitting participating employees’ withholding taxes to the state, and retaining a portion as a tax credit
- Submitting a year-end MD Form 500CR to the State
The credit is applicable to the following expenses:
- Transit Instruments: MTA passes, tickets, fare cards, smart cards or vouchers used by employees to ride publicly or privately owned transit systems except taxi services. Employers can purchase transit instruments from MTA Commuter Choice Maryland, WMATA Smart Benefits, or Montgomery County Fare Share.
- Company vanpool program: Van purchase/lease, fuel, insurance, maintenance, safety and equal access upgrades, and taxes and licenses.
- Company Guaranteed Ride Home program: Expenses involved when an employer offers transportation home to an employee who is currently commuting by transit or vanpool and has a home emergency or unscheduled overtime. Employer may offer taxi rides, rental car, company vehicle, or transit.
- Company Cash In Lieu of Parking program: Expenses involved when an employer offers an employee the taxable cash equivalent of a parking subsidy the employer is paying to provide that employee a subsidized parking space. Employee can either pay the full market value for the parking space or pocket the money and ride transit or a vanpool.
What constitutes a “qualified” vanpool?
- The vanpool travels between the employee’s residence and work location;
- The van has a seating capacity for at least eight adults;
- At least 80% of the van’s mileage is for the purpose of transporting employees; and
- At least one half of the vehicle’s seating capacity is used.
How does an employer take the credit?
- Submit a registration form to the State of Maryland prior to filing a tax form. The form should be submitted to: Buddy Alves, MTA, 6 St. Paul St., Office of Communications and Marketing, Baltimore, MD 21202; and
- Complete Form 500CR to apply tax credits toward the total tax liability for the calendar year in which the commuter benefits are paid.
Maryland Transit Administration
Comptroller of Maryland
Employers must submit a registration form to the state prior to the last day of the taxable year in which the credit will be claimed. To obtain a registration form, call 410-767-8750, or click here.