As of January 1, 2016, the Federal Government now allows a pre-tax commuter benefit of $255 per month. That means you could save up to $1,000 a year on your trip to and from work.
If you need to pay for parking in order to make your transit connection, the parking fees can be funded with pre-tax dollars up to an additional $255 per month.
To take advantage of these tax savings, your employer needs to opt-in to either the NJ TRANSIT BusinessPass program or one of the programs offered by a third party provider like Commuter Check (Wired Commute/Edenred), eTRAC (Benefit Resource Inc.), TotalBen LLC, TranBen Ltd., RideECO (Delaware Valley Regional Planning Commission), or TransitChek (WageWorks).
When your employer participates in a commuter pre-tax benefit program they will actually reduce the amount of payroll taxes they have to pay.