2.7 Million Transit Riders May Lose Tax Parity With Drivers

By Justin Horner

As you may know, Federal tax law allows many Americans to set-aside up to $230 a month pre-tax to pay for transit.  This is a great benefit that rewards and encourages transit use.  And while the maximum set-aside had been $120 per month for years, the monthly limit was raised to $230 in the first Stiumulus and wisely renewed by Congress last year.

According to the Washington Post, however, renewal time is once again quickly approaching, and without action, the transit set-aside limit will revert to $120 at the end of this year. According to the Association for Commuter Transportation (ACT),such a cut would effectively be “a tax increase for the over 2.7 million public transit and vanpool commuters that currently use this benefit.”

To add insult to injuury, the same lack of Congressional action will see the set-aside for parking actually increase to $240 per month.

Now, full disclosure, I use the transit set-aside program and go close to maxing it out every month.  It makes it easier and more cost-effective for me and my wife to use transit every day.  And we’re not the only ones.  ACT estimates that nearly 1 in 5 employees shift from driving alone to transit when offered pre-tax benefits.

And if that weren’t enough, transit riders save even more money from the car maintenance, gas, tolls and parking charges they aren’t paying while they ride.  In fact, the American Public Transit Association estimates that such a switch can save Americans, on average, more than $800 per month.

Cutting benefits for working Americans just because they don’t drive to work doesn’t make sense.  Not only will it cost workers more, but we’ll also see more traffic on the roads and more pollution.

Congress should move quickly to extend this important benefit and make parking and transit permanently equal for pre-tax benefit purposes.  You can visit the Americans for Commuter Transportation website to take action and add your voice on this important issue.