Many workers in the region who take advantage of commuter tax benefits could be out in the cold next year. Federal law allows workers to use pretax income to cover the cost of commuting, up to a limit of $230/month for parking and $230/month for public transportation (or $20/month for bicycle-related expenses). But this equality between parking and public transit may be short-lived, since the law which increased the transit benefit is set to expire next year. If that occurs, transit riders will be unable to set aside more than $120/month for commuting costs.
That would be a hit to the pocketbook for many riders of the LIRR, Metro-North, CT’s Shore Line East, New Jersey trains and buses, and NYC express buses.
Congress successfully staved off the expiration of benefit parity last year, extending it through 2011. In May, Senator Charles Schumer introduced a bill (S1034/HR2412) to permanently increase the transit benefit to $230/month; the bill has been co-sponsored by the five other senators representing New Jersey, New York, and Connecticut — Senators Lautenberg, Menendez, Gillibrand, Blumenthal, and Lieberman. Sen. Schumer has long championed the transit benefit, and was instrumental both in increasing it to its current level in 2009 and in extending the benefit last year.
Organizations that provide commuter benefits (such as TransitCenter, in our region), have also set up an action and information website, CommuterBenefitsWorkForUs.com. Here, workers can e-mail Congress and learn more about the pretax benefits.
Another option for transit advocates to consider in light of efforts to reduce the budget deficit is dropping both the parking tax credit and the transit tax credit. This maintains the even mode choice playing field, gives transit a contribution to reducing the federal deficit and, by giving up the credits, allows advocates to better defend transit formula grants from cuts.
Another great post, thanks for the write up! Have a great day and cant wait to see future posts