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September 19, 2023

Illinois law requires that employers provide transit benefits to their employees starting in 2024

Illinois law creates the Transportation Benefits Program Act (HB 2068), which, effective January 1, 2024, requires that Illinois employers with 50 or employees in designated transit zones provide transit benefits to their covered employees.

Covered employers

A covered employer is (1) any individual, partnership, association, corporation, limited liability company, government, non-profit organization or business trust that (2) directly or indirectly, or through an agent or any other person, employs or exercises control over wages, hours or working conditions of an employee and (3) that employs 50 or more covered employees at an address that is within one mile of a fixed-route transit service.

Covered employers are those located within one or more of the following 38 designated Illinois transit zones:

Addison Township

Frankfort Township in Will County

Plainfield Township

Algonquin Township

Geneva Township

Shields Township

Aurora Township

Grant Township in Lake County

St. Charles Township

Avon Township

Homer Township

Troy Township

Batavia Township

Joliet Township

Vernon Township

Benton Township

Libertyville Township

Warren Township in Lake County

Bloomingdale Township

Lisle Township

Waukegan Township

Cook County

Lockport Township

West Deerfield Township

Deerfield Township

McHenry Township

Wheatland Township in Will County

Downers Grove Township

Milton Township

Winfield Township

Dundee Township

Naperville Township

York Township

DuPage Township

New Lenox Township

Zion Township

Elgin Township

Nunda Township


Covered employees

Employees who perform an average of 35 hours of work per week for compensation on a full-time basis are eligible for transit benefits under the law.

Transit benefits must be offered to all covered employees starting with their first full pay period after 120 days of employment.

Transit benefits

Covered employers are required to allow covered employees to purchase transit passes with pre-tax dollars through payroll deduction up to the federal limit under IRC Section 132(f). An employer also may comply with this requirement by participating in a program offered by the Chicago Transit Authority or the Regional Transportation Authority.

Ernst & Young LLP insights

Illinois is now the second state, after New Jersey (see Tax Alert 2019-0588), to require that employers provide pre-tax transit benefits to their employees. In addition, the District of Columbia requires employers to offer employees clean-air transportation alternatives to parking benefits through pre-tax fringe benefits or pay a compliance fee (see EY Tax Alert 2022-1787.)

Numerous localities require that employers provide transit benefits to their employees, most recently, Philadelphia, which, effective December 31, 2022, requires that employers with 50 or more covered employees provide mass transit or bicycle commuter benefits to covered employees under its Employee Commuter Transit Benefit Program. (See Tax Alert 2023-0471.)


Contact Information
For additional information concerning this Alert, please contact:
Workforce Tax Services - Employment Tax Advisory Services
   • Kristie Lowery (
   • Kenneth Hausser (
   • Debera Salam (

Published by NTD’s Tax Technical Knowledge Services group; Andrea Ben-Yosef, legal editor