Maryland Commuter Benefits Tax Credit Program
Maryland Commuter Choice Tax Credit Program
Maryland's Commuter Choice program, administered by the Maryland Department of Transportation (MDOT), offers one of the most generous state-level commuter tax credits in the United States. Employers can claim a 50% tax credit on commuter benefits provided to employees, up to $100 per month ($1,200 annually) per employee. The program was expanded in 2022 from four to eight qualifying benefit types, making it easier for employers to participate and claim credits.
This is a voluntary incentive program with no compliance requirements. Any Maryland employer can choose to participate to receive tax benefits.
Covered employee: Any employee who receives qualifying commuter benefits from their employer in Maryland. There are no specific eligibility requirements for employees.
Covered employer: Any business entity that operates a trade or business in Maryland, including private companies and nonprofits exempt from taxation under §501(c)(3) or (4) of the Internal Revenue Code. Property managers can also claim credits for benefits provided to tenants' employees at managed worksites. There is no minimum employee threshold.
Any Maryland employer that provides qualifying commuter benefits to employees can claim the tax credit. This includes private companies, nonprofits exempt under §501(c)(3) or (4), and property managers providing benefits to tenants' employees. The credit equals 50% of qualifying commuter benefit costs up to $100 per employee per month ($1,200 per employee annually).
Since this is a voluntary program, there are no compliance requirements. To participate and claim the tax credit, employers should:
- Design a commuter benefits program choosing from the eight qualifying categories
- Register online through Maryland's OneStop Portal (registration must be renewed annually)
- Implement the benefits program for employees
- Claim the 50% tax credit on qualifying expenses when filing Maryland tax returns
Maryland employers can claim a 50% tax credit on qualifying commuter benefits provided to employees, up to $100 per month ($1,200 annually) per employee. Employers first register through Maryland's OneStop Portal, then implement their chosen commuter benefits program. When filing their Maryland tax return, they claim the credit for qualifying expenses. This can be combined with federal pre-tax benefits, allowing employers to stack state tax credits with federal FICA tax savings of 7.65% on benefit amounts.
The program covers eight different types of commuter benefits:
- Public Transit (MTA Bus & Light Rail, MARC Train, WMATA Metro, Private transit systems)
- Vanpool Programs (Vehicles with 6+ adult capacity, home-to-workplace transport)
- Carpool Support (2+ people sharing 80% of trip, E-ZPass & toll reimbursement)
- Active Transportation (Bike maintenance & gear, bikeshare memberships)
- Telework Support (Prorated internet costs, computer equipment, co-working space)
- Guaranteed Ride Home (Emergency transportation, taxi services)
- Parking Cash-Out (Cash equivalent to parking subsidy)
- Multimodal Last-Mile (Ride-hail connections up to 5 miles that link transit to workplace)
Ready to maximize savings with Maryland's generous commuter benefits tax credit while supporting sustainable transportation and employee satisfaction?
The program itself is an incentive program offering:
- 50% tax credit on qualifying commuter benefits up to $100/month per employee
- Additional federal tax benefits through pre-tax payroll deductions (up to $325/month in 2025)
- FICA tax savings of 7.65% on benefit amounts
- Reduced parking costs and demand
- Enhanced employee recruitment and retention
- Improved corporate sustainability profile
MDOT also offers free resources including webinars, technical assistance, an Employer Partner recognition program, and marketing support materials.
