Time is Short to Extend Pre-Tax Transit Benefit Limits

0

Once again, public transportation commuters and their employers are threatened with the loss of an important tax benefit.  Transit commuters may currently set aside up to $245 monthly from their earnings on a pre-tax basis to defray fares that they pay for travel to work, and the commuters’ employers are not subject to federal payroll taxes on the amount set aside.  This amount is equal to the maximum pre-tax benefit that commuters who drive may receive for parking.  Unfortunately, parity between transit and parking pre-tax benefits is currently temporary and will expire at the end of 2013.  If nothing is done, the maximum monthly transit benefit for 2014 is scheduled to drop by almost one-half to $125.

Only Congress can maintain this important tax benefit.  When parity provisions expired at the end of 2011 it took until the end of 2012 to have them reinstated, resulting in higher taxes for commuters and businesses and creating confusion about the benefit.  The answer is to make parity between pre-tax transit and parking benefits permanent.  Fortunately, legislation has been introduced in both the House (Commuter Parity Act of 2013) and Senate (Commuter Benefits Equity Act of 2013) to ensure that commuters who make the responsible choice of using transit are eligible for tax benefits equal to those available to those who drive to work.

Want to add your voice?  Contact your Senators and Congressman and let them know that you want them to work hard to maintain pre-tax commuter benefits for public transportation riders.

 

Share.