Transit Benefit will revert to $130 on January 1, 2014!
Act now to maintain the current pre-tax monthly level of the transit commuter benefit.
The transit commuter benefit is an employer-provided federal tax benefit that allows working families to save money on their daily commute by paying for their transit expenses with pre-tax dollars. The benefit provides an incentive for commuters to use public transportation, which helps reduce traffic congestion, improve air quality, save energy and decrease our reliance on foreign fuel imports. 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.
On January 1, 2013 when the American Taxpayer Relief Act of 2012 was signed into law, the maximum monthly excludable amount (“cap”) of the transit portion of the commuter benefit was restored to the same level as the benefit for parking, to $245 per month. Employees who take full advantage of the maximum monthly cap via pre-tax payroll deductions can save over $1100 a year on their transit and vanpooling fares depending on their tax bracket. Employers can save approximately $225 annually per employee on FICA taxes. This benefit works for everyone!
Unfortunately, the increase in the transit portion of the commuter benefit is only temporary - it will revert to $130 on January 1, 2014, unless Congress enacts new legislation 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 $245, is a permanent part of the tax code and thanks to another automatic cost of living increase on January 1, 2014 will be $250. The disparity between the two benefits will be higher than any previous years.
Legislation pending in Congress will create permanent parity between the parking and transit/vanpool portions of the commuter benefit. In the House, Congressman Michael Grimm (R-NY) was joined by Congressman Jim McGovern (D-MA), Congressman Peter King (R-NY) and Congressman Earl Blumenauer (D-OR) in introducing H.R. 2288, the Commuter Parity Act. The Senate bill, S. 1116, the Commuter Benefits Equity Act, was introduced by Senator Charles Schumer (D-NY).
It is critical that you contact your members of Congress and tell them to support passage of this legislation before the end of the 2013, and ask them to sign up as co-sponsors for the bills. Securing the support of additional members of Congress is vital for passage of this legislation and cannot be done without your help.
Please act now and urge members of your Congressional delegation to work to ensure that any tax legislation considered this year establishes permanent parity between the parking and transit portions of the commuter benefit. Voice your support of the transit benefit by clicking the button to the right and sending a letter to your members of Congress.