MARYLAND COMMUTER TAX CREDIT PROGRAM

What is the Maryland Commuter Tax Credit Program?

The program allows Maryland businesses to claim a 50% tax credit for the cost of providing commuter fringe benefits to its employees up to a maximum credit of $50 per participating employee per month.

Which taxes can the credit be claimed against?

The State income tax, financial institution franchise tax, or the insurance premium tax.

Who qualifies for the credit? 
A person or corporation conducting a trade or business in Maryland; or A Maryland organization that is exempt from taxation under Section 501 (C)(3) or (4) of the Internal Revenue Code.

What expenses are eligible for the tax credit?

Transit instruments - pass, ticket, farecard, or voucher used by employees to ride publicly or privately owned transit systems except taxi services.

Employers can purchase transit instruments from Maryland Transit Administration's (MTA) Commuter Choice Maryland, Washington Metropolitan Area Transit Authority's (WMATA) Metrochek, or Montgomery County, Maryland's Fare Share programs.

Vanpool and related costs - Van purchase/lease, fuel, insurance, maintenance, safety, and equal access upgrades.

Guaranteed Ride Home program - expenses involved when an employer offers transportation to an employee who is currently commuting by transit or vanpool and has a home emergency or unscheduled overtime.

Cash in Lieu of Parking program - expenses involved when an employer offers an employee the taxable cash equivalent to a parking subsidy the employer is paying to provide a parking space.

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 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.

What if there are questions?

Maryland Transit Administration - 410-767-8755 or www.commuterchoicemaryland.com  
Comptroller of Maryland - 1-800-638-2937 or taxhelp@comp.state.md.us