Congress moves to preserve tax benefit for transit commuters

December 17, 2010
By Stephen Lee Davis

We have some good news to report back. The tax package that the House approved today and sent to President Obama for his signature this afternoon contains a one-year extension of the $230 per month commuter tax benefit for transit users. (Background on the issue)

This is terrific news and means that transit users won’t see their benefits cut in half come January 1st.

This benefit for transit commuters, which was raised and equalized with the existing parking benefit at $230 in the 2009 stimulus bill, was due to expire at the end of the year and go back to the old $120 amount— meaning the amount of money transit users can get taken out of their paycheck tax free each month for their commute would be cut in half. Meanwhile, those who choose or need to drive and park would continue getting the $230 benefit each month.

We didn’t think that was fair and thousands of you didn’t think so either. Perhaps you signed the Commuter Nation petition or sent an email or made a phone call to Congress. They got the message and a handful of leaders in the Senate and House worked to get that provision into the tax bill.

For occasional commuters, $120 might be enough, but for those that take and depend on transit every day and spend more than $120 each month — especially those that use more expensive commuter rail or heavy rail systems — they would have had to pay taxes on more of their income each month, putting a dent in the wallet at the time when unemployment is high and money is tight for most Americans.

Estimates varied by agency, but here in Washington, D.C., WMATA said about 285,000 of their users took advantage of the federal program to get part of their paycheck tax-free, and about 90,000 customers needed more than the old $120 amount. And about half the riders of MARC, Maryland’s commuter rail service, use the full $230 or more.

To spell out the financial difference, without the extension commuters who spend $230 each month, $1,320 more of their pay would be taxable each year — costing them several hundred dollars in taxes each year.

Take a minute and call your Senators and Representative and thank them for including this in the bill. We all benefit when more people use public transportation and it’s only fair that transit commuters and drivers have access to the same tax benefits. Tell them why transit matters and why we need to help keep more money in our pockets — no matter how we choose to get to work.

Call the Capitol Switchboard at (202) 224-3121 and ask to speak to your Senators or Representative. You can deliver a quick thanks and a message to the person who answers the phone.

Filed under: Campaign Blog
Tags: commuting, tax benefit, transit

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http://Goodnews,toolate Patrick

Great they are helping more Americans with this extension. But it’s too late for Jan and Feb for many people. ADP has already deducted both Jan and Feb amounts from my paychecks. They used a limit of $120, which is what the law would allow, until this extension was passed. ADP does not allow paper submissions for commuter benefit plans, at least under the plan/service agreement with my company. Many others are dealing with the same facts. So, for Jan and Feb, we’re limited to only $120. This essentially takes away the benefit for a whole month, or 1/12th of the benefit.

So, thank them for passing this extension? OK, here is my thanks:
Thank you politicians for putting your own self interest and politics ahead of your constituents’ interests. Thank you for letting election year politics, and current political agendas stall your obligations to the public. Extension of these commuter benefits is great, just too late.
http://www.yahoo.com John Kelley Magee

I’ve taken the buses to work everydays. I don’t have a car, I can not afford to get a car. gas prices are going up, and require car insurance for this state.