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Groundhog Day for Pre-Tax Commuter Benefits

We’ve been here before: fighting to make sure our federal tax policy doesn’t encourage people to drive instead of using transit. Federal commuter tax benefits enable commuters to use pre-tax dollars to pay for their commute, and currently about 2.7 million workers in the United States take advantage of these benefits. Unfortunately, on January 1, 2015, Congress failed to act, and the parity between transit and parking benefits expired. This has once again led to an unbalanced situation in which people who drive to work are now eligible to use up to $245 in pre-tax earnings for parking each month, while the maximum pre-tax benefit for those who use transit is only $130.

The two bills that have been introduced are a bipartisan effort, led by our New York contingent—one by Representative Peter King (HR 990, which would set the monthly caps for both parking and transit at $235 a month), and another by Senator Chuck Schumer (S. 1792, which would set both monthly caps at $250). Insiders say there was an attempt to get bipartisan legislation included in the recently-signed federal transportation bill, but like many good ideas, it was left on the cutting room floor.

What we need now is a permanent tax extenders deal, one that provides full, permanent parity so we don’t have to revisit this, year in and year out. No one appears to have any objections per se. In fact, a recent letter organized by Representative Daniel Lipinski of Illinois shows strong bi-partisan support across the country. The time is now to tell Congress to restore parity and make it permanent.

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Mr. Transit
Mr. Transit
8 years ago

Proponnnents of cap extenders keep failing because they keep trying to expand the cost of the program. Not an easy thing in this fiscal environment (see also House budget hawks). Why not cap both programs at $200 a month. I’m guessing that 90% of public transit commuters pay less than $200 per month. The only people who might pay more are mid and longer distance commuter rail riders. $200 would still be better than $130. Congressman King and Senator Schumer need to be more realistic. Lowering the parking benefit also helps shift drivers to transit and not many folks spend over $200 a month for parking, either.

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[…] transit commuters — Congress plans to permanently restore parity between transit and parking tax benefits for commuters. Starting in 2016, transit riders […]

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