New Jersey commuters burdened with the cost of transit fare and parking will get a break under a new state law that will allow them to pay using pre-tax dollars from their paychecks.

Gov. Phil Murphy signed a bill into law Friday requiring employers with more than 20 employees to offer pre-tax commuting benefits. Under the program, employees can set aside money from their paychecks before taxes are taken out to put toward commuting costs, similar to how Heath Savings Accounts or flexible spending accounts work for health costs .

“Providing this pre-tax benefit to commuters throughout our state will reduce the financial burden of fares and parking costs, resulting in significant savings,” Murphy said in a statement.

Employees can decide to set aside up to $260 a month for transit passes, which can be purchased through vouchers, fare cards, smart cards, direct payments to a transit operator or debit cards. While not required, employers can also offer to deduct up to $260 a month for parking. The commuting benefit is not offered to employees covered by a collective bargaining contract.

Primary sponsors of the bipartisan bill were state Senate Majority Leader Loretta Weinberg, D-Bergen, and state Assemblymen Daniel Benson, D-Mercer, Thomas Giblin, D-Passaic, and Anthony Bucco, R-Morris. It was passed by the state Senate and Assembly on Jan. 31.

Commuters could save up to $900 a year by using the benefit, said Janna Chernetz, Tri-State Transportation Campaign Deputy Director.

“This is a true win that commuters can start feeling immediately and where it matters most, their wallets,” said Chernetz, who commutes on NJ Transit.

Larry Higgs may be reached at lhiggs@njadvancemedia.com. Follow him on Twitter @commutinglarry. Find NJ.com on Facebook.

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