Commuter Benefit Parity Act of 2015 Introduced!
H.R. 990, the Commuter Benefit Parity Act of 2015 was introduced on February 13, in the House of Representatives.
Sponsored by Rep. Peter King (R-NY), this bipartisan legislation would establish parity between the parking and transit portions of the transportation fringe benefit by setting the monthly caps for both at $235/month. Joining Rep. King in introducing the legislation were Representatives Rep. Earl Blumenauer (D-OR), Robert Dold (R-IL), Randy Hultgren (R-IL), Leonard Lance (R-NJ), Daniel Lipinski (D-IL), Sean Patrick Maloney (D-NY), and Jim McGovern (D-MA). During the past several years, these and other members of Congress have been working together to bring permanent parity to transit and parking pre-tax benefits.
On January 1, the pre-tax monthly limit on the transit portion of the Commuter Benefit reverted back to a level well below the level that is permitted for parking – burdening users of public transit with higher effective taxes than those who drive to work. Does this disparity make sense to you? It doesn’t to us and it doesn't to many Members of Congress.
With H.R. 990 now introduced, you need to let Congress know this is important to you. Permanent parity between commuting benefits is possible for 2015, but you must tell your Congressional representatives, today, that saving money on your commute matters to you and your family! Congressional leadership publicly stated its intent to address tax issues like Commuter Benefits when it reconvened in January.
About The Effort
The transit portion of the Commuter Benefit is an employer-provided Federal tax benefit that allows working families to save money on their daily commutes by paying for their transit expenses with pre-tax dollars. The benefit is a significant incentive for commuters to use public transportation. It helps reduce traffic congestion, improve air quality and save energy. It also saves businesses of all sizes critical dollars through a reduction in payroll taxes that are reinvested in our economy to create new jobs and retain current employees.
The disparity between the transit and parking benefits is as high as it has ever been. Furthermore, the decrease in the transit portion for 2015 effectively increases taxes not just for the employees that utilize the transit portion, but for their employers, also.
In 2014, Legislation was pending in Congress to create permanent parity between the parking and transit/vanpool portions of the Commuter Benefit, but both died at the end of the 113th Congress. Legislation in the House (H.R. 2288, the Commuter Parity Act) was introduced with strong bi-partisan support. This legislation also increased the commuter bicycle benefit to $35 per month and permitted the bicycle portion to be used for bicycle sharing. In the Senate, there was a similar bill (S. 1116, the Commuter Benefits Equity Act).
With 2015 and the start of the 114th Congress, it is critical that you contact your Members of Congress and tell them to support Commuter Benefit Parity in 2015. Ask them to sign up as co-sponsors for the bills that are introduced. Securing the support of additional members of Congress is vital for passage of the legislation in 2015 and cannot be done without your help.
At the end of 2014, the cap was increased retroactively for 2014, but this brought little gain to most commuters who receive the transit benefit. For most commuters, it has been over a year since the cap on the transit benefit decreased to $130/month. There has been a lot of talk, but little action. Commuters need action now from Congress to raise the current pre-tax monthly level of the transit portion of the Commuter Benefit to equal the level that is permitted for parking.
Click the link on the right and connect with your Members of Congress to tell them that the time for action is now!
Why is there still a disparity between the transit and parking portions of the Commuter Benefit?
On December 19, 2013 when the Tax Increase Prevention Act of 2014 was signed into law, the maximum monthly excludable amount (“cap”) of the transit portion of the Commuter Benefit was restored to $250 per month, the same level as the benefit for parking, retroactive to January 1, 2014, and only for 2014.
However, only employees who took full advantage of the maximum monthly cap via pre-tax payroll deductions, and whose employers had proper documentation, saved over $1100 for 2014 on their transit and vanpooling fares depending on their tax bracket. Employers saved approximately $225 annually per employee on FICA taxes.
Unfortunately, the provision was only temporary and on January 1st of 2015 - it reverted to $130, as Congress failed to enact new legislation before the end of 2014 to make the increase permanent or extend it for an additional period of time. In comparison, the monthly limit for the parking portion of the Commuter Benefit, which also increased to $250 in 2014, is a permanent part of the tax code.
Click here to see the Coalition's Statement to the House Ways and Means Committee on tax reform.