Illinois enacted the Transportation Benefits Program Act on July 28, 2023, making it mandatory for employers in Cook County and designated areas to provide full-time employees with the option to purchase pre-tax transit passes. The law will be in effect from January 1, 2024.
Covered Employers and Employees
Employers are covered by the law if they employ at least 50 workers within one mile of fixed-route transit in Cook County or 37 townships listed in the law.
The program covers all full-time employees who work an average of at least 35 hours per week.
The law covers employers with 50 or more employees located in delineated geographic areas.
Transportation Benefit Requirement
Under the new law, covered employers must provide a pre-tax commuter benefit to covered employees that allows the employees to use pre-tax dollars to purchase a transit pass via a payroll deduction. The benefit must allow the cost of the transit pass to be excluded from the employee’s taxable wages and compensation up to the maximum amount permitted by federal tax law, consistent with 26 U.S.C. 132(f).
The transit benefit must be offered to employees starting on their first full pay period after 120 days of employment.
The law tasks the Regional Transportation Authority with creating a searchable map of addresses located within one mile of fixed-route transit service.
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