The cost of commuting could get a whole lot more expensive in 2014 for people who currently receive tax benefits for riding public transit to work.
Thanks to a lack of action by Congress, the commuter tax benefit for public transit riders will be slashed almost in half at the end of the month. NPR’s David Welna explains:
For the past four years, public transportation users and people who drive their cars to work and pay for parking have been able set aside up to $245 a month in wages tax free if they're used for commuting costs or workplace parking.
The transit tax break expires at the end of the year. So starting Jan. 1, the benefit for riders will be cut nearly in half — to $130 a month. Drivers, on the other hand, will get a slightly bigger break as their parking benefit rises to $250.
If this seems like a bad idea, that’s because it is.
The change will cost public transit commuters up to $1,380 a year at a time when many households are still struggling to make ends meet. But it isn’t just employees who will lose out if Congress doesn’t act before the end of the year. Many employers take advantage of this helpful tax break to reduce their payroll taxes. Employers can use these savings to expand their business, hire more workers, or increase employee benefits.
Allowing the commuter transit benefit to be cut is not just bad economics; it’s bad public policy: it incentivizes driving over using public transit, resulting in more cars on the road, more pollution, and more traffic jams.
We need to make public transit a national priority, and that means encouraging more people to use it, as well as expanding it to more communities. Public policy that makes driving and parking more attractive than using public transit represents a backward step.
We need to be moving forward in making public transit a bigger focus for all Americans: It’s time to establish permanent parity between the parking and transit portions of the commuter tax benefit.
Tell your representatives in Washington to join the bi-partisan effort to restore the public transit commuter benefit.
The truth is, even employees and businesses that don’t take advantage of the tax break will be better off if Congress restores the transit commuter benefit. The more people using public transit to get to the office, the fewer cars there are out on the road. That means employees shorter commute times, cleaner air, and reduced congestion for everyone.
We still have time to save the commuter tax benefit for public transit riders, but the clock is ticking.
Legislation was recently introduced in both the U.S. Senate and House of Representatives to establish permanent parity between the transit and parking commuter benefits.
Be a voice for public transit! Ask your Congressional delegation to support the commuter tax benefit
for public transit and help ensure all commuters are treated fairly, no matter how they get to work.