SCHUMER ANNOUNCES EXTENSION OF VITAL TAX BENEFIT FOR MASS TRANSIT COMMUTERS INCLUDED IN JUST-UNVEILED TAX PACKAGE; LEGISLATION PERMANENTLY EXTENDS MASS TRANSIT BENEFIT WHICH SAVES SUBWAY, BUS AND OTHER MASS TRANSIT COMMUTERS OVER $1,000 PER YEAR
Over 700K Commuters in Greater NY Metro Area Take Advantage of Federal Benefit; Commuters Received Up to $250 in Pre-Tax Savings in 2014 On Mass Transit Commute Each Month Until the Provision Expired Jan 1st of This Year Dropping Monthly Savings to $130
Schumer Successfully Pushed to Reinstate and Extend Commuter Benefit At Rate of $250 for 2015 and $255 for 2016 in Monthly Pre-Tax Savings Legislation Would Permanently Provide Much-Needed Parity Between Commuters Who Drive & Those Who Use Mass Transit
Schumer: Permanent Extension Puts Money in the Pockets of Hard-Pressed Commuters
U.S. Senator Charles E. Schumer today announced that the just-unveiled must-pass tax “extenders package,” the Protecting Americans From Tax Hikes Act of 2015, includes a permanent extension of the “mass transit tax benefit,” which would provide $250 per month for 2015 and $255 for 2016 in pre-tax savings to help cut costs for mass transit commuters. Parity for the parking and mass transit benefit expired on January 1st 2015, dropping the mass transit pre-tax savings to only $130. With Schumer’s successful push, a provision that would establish permanent parity between the mass transit and parking benefit was included in the tax extenders package. When passed, qualifying mass transit commuters would be able to receive up to $250 per month for 2015 and $255 per month for 2016 in tax deductions, with a cost-of-living adjustment after 2015. Schumer said that with the passage of this legislation hundreds of thousands of commuters would be eligible for higher tax deductions to save them hundreds of dollars a year. Schumer, who was the original author of the legislation that provided parity between the mass transit and parking benefits, said that this benefit will put tax savings back into the pockets of New York City commuters, and will once again give mass transit commuters the same tax break that those who commute by car receive for parking costs. Currently an individual making $60,000 of taxable income taking the current full mass transit deduction would only be able to save $390 a year. With Schumer’s provision providing parity between the mass transit and parking benefits, that same individual would be able to save $765 next year taking the full mass transit deduction, a savings of $375.
“This is a huge victory for New York City’s mass transit commuters that can save them hard-earned dollars on their expensive commutes. As the price of commuting continues to climb, this commuter tax break has become increasingly vital for New York City residents, who already experience a very high cost of living. Mass transit is the lifeblood of the greater New York City area, and that’s why I pushed so hard to have the federal transit benefit included in this must-pass bill,” said Schumer. “The recently-unveiled Protecting Americans From Tax Hikes Act, known as the ‘tax extenders’ bill would provide much-needed parity between the commuter benefit and the parking benefit. It makes absolutely no sense to provide those who drive to work with a massive tax break and make commuters who use mass transit pay more.”
“Wageworks is pleased that Congress has addressed permanent parity between parking and transit benefits. This helps middle class Americans across the country. Senator Schumer's leadership on this important issue has been critical and we sincerely appreciate the role he has played,” said Dan Neuburger at Wageworks.
Schumer was the initial author of the legislation that provided parity between the mass transit and parking benefits, and it was first passed as part of the stimulus package. This benefit is a tax deduction available to commuters who receive fringe benefits from their employer for riding the bus, taking the subway or using another form of public transportation to commute to work. The benefit has saved many mass transit riders over $1,000 per year. Schumer said the benefit in 2013 covered up to $245 per month from a person’s wages to help pay for their mass transit commutes and provided parity with a previous benefit extended to drivers’ parking costs. In 2013 alone, approximately 700,000 New York area commuters saved over $330 million through this benefit.
In 2009, the mass transit benefit was almost doubled, jumping from $120 per month to $230 per month and creating a savings of over $1000 per year for many commuters. In 2013, 700,000 commuters in the Greater New York Metropolitan Area, and 2.7 million commuters nationwide took advantage of the benefit. However, the benefit expired on January 1st, 2015 and Congress failed to extend it through 2014. Schumer authored legislation that passed as part of the economic stimulus package in 2008, allowing employers to offer their employees up to $230 per month in transit benefits tax free, equal to what they were offering tax-free for parking costs. The transit benefit can reduce a commuter’s transportation costs by a third or more. Because the benefit had not been reinstated and extended into 2015, there was a create a greater incentive for people to drive to work rather than take mass transit, as the $250 pre-tax savings only applied to those who drive, while the transit benefit has been only $130. Schumer said that the more people who commute via mass transit, the better it is for the environment and for keeping traffic down for those who do commute by car. Schumer explained that the recently-unveiled tax extenders bill fixes this inequality and extends the parity.