The Transit Benefit Program is a provision of the Internal Revenue Code [(26 USC 132(f)] that permits an employer to pay for an employee’s cost of commuting to work in other than a single occupancy vehicle. The program is designed to improve air quality, reduce traffic congestion, and conserve energy by encouraging employees to commute by means other than single occupancy motor vehicles.

Under the program, an employer may provide up to $65 per month to those employees who commute to work by transit or van pool. The employer can deduct these costs as business expenses and the employees do not report the subsidy as income for tax purposes. The subsidy is considered a "qualified transportation fringe" benefit. (source click here)