Commute By Public Transit? Your Tax Benefit Is Being Cut

Photo: Istock

related articles

Right now, commuters who get out of their cars and onto public buses and trains can avoid paying taxes on up to pay for up to $2,760 of income - $230 per month.

But because Congress hasn't reauthorized this commuter benefit, so it is set to revert to $125 per month starting in January. The halving of the benefit is, in the eyes of the American Public Transportation Association, akin to subsidizing car commuting. Why? Because commuters can still benefit from up to $240 per month in tax-free parking expenses starting in January (up from $230 currently).

The association is urging commuters who use public transit to tell your representatives to put the public transit benefit into any tax deal reached before year's end, and to support legislation co-sponsored by U.S. Rep. Jim McGovern (D-Mass.) and Sen. Chuck Schumer (D-N.Y.) to that would keep parking and public transportation tax benefits equal in perpetuity.

“If the transit commuter benefit is allowed to expire, it will serve as a tax increase on transit riders and their employers,” said Michael Melaniphy, president and CEO of the American Public Transportation Association. "It will amount to allowing payroll taxes to increase on both employees and the employers who offer the benefits. People should have reasonable transportation choices and federal tax law should maintain a level playing field for those choices."

COMMENTS ()