Over 170,000 Westchester, Rockland & Putnam Commuters Who Take Metro-North Daily Are Eligible to Receive Now-Permanent Commuter Tax Break—But Some Don't Know About The Benefit Or How Easy It Is To Access

Schumer Successfully Pushed to Reinstate & Extend Commuter Benefit At Rate of $250 for 2015 and $255 for 2016 in Monthly Pre-Tax Savings; Legislation Now Provides Permanent Savings Commuters Can Bank On

Schumer: Mass Transit Users Should Get On Board With Commuter Tax Benefit So They Can Put The Savings To Good Use

Standing at the White Plains Train Station in Westchester, U.S. Senator Charles Schumer today told Metro-North riders about the recently passed mass transit tax benefit. With Schumer’s successful efforts late last month, qualifying mass transit commuters are now eligible 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. This mass transit tax befit was included in the recently passed tax “extenders package,” the Protecting Americans From Tax Hikes Act of 2015, which Schumer fought to pass. This legislation provides permanent parity between the parking and mass-transit commuter benefit, nearly doubling the value of the mass transit benefit. Schumer said not all commuters know about this cost-cutting benefit available to them or exactly how to claim it for themselves yet. During his visit, Schumer personally passed out key instructions prepared by his office to Metro-North users and discussed the benefit with riders.

“This is a huge victory for Westchester and the Lower Hudson Valley’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 Westchester, Rockland and Putnam residents, who experience a very high cost of living. Mass transit is the lifeblood of Hudson Valley and 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. “This recently-passed Protecting Americans From Tax Hikes Act legislation provides much-needed parity between the commuter benefit and the parking benefit.”

According to Metro-North, an average of 170,000 customers from Westchester, Rockland and Putnam use the commuter railroad each weekday. Schumer said that, with the passage of this legislation, these customers 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 residents in Westchester and throughout the Lower Hudson Valley, and will once again give Metro-North 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.

Schumer explained that 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 Senator said, however, that many commuters now eligible for higher tax deductions may not know that they must apply through their employer, which is simple to do and of no burden to either party. 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.  

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. This legislation increased the benefit from $120 per month to $230 per month, 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, reverting to $130 a month and Congress failed to extend it through 2015 until last month. Because the benefit had not been reinstated and extended into 2015, there was 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. Schumer explained that the recently passed tax extenders bill fixes the inequality between benefits provided to mass-transit commuters and driving commuters. 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 was joined by White Plains Mayor Thomas Roach and Congresswoman Nita Lowey.

“New Yorkers already send more than their fair share of taxpayer dollars to Washington. These permanent mass transit benefits give commuters who use public transportation a more fair shake. As Ranking Member on the House Appropriations Committee, I will continue working with Senator Schumer and local officials to secure federal investments that help give relief to Lower Hudson Valley families,” said Congresswoman Nita Lowey.

Schumer said that the mass transit benefit covered a large portion of the typical monthly pass from Metro North commuting areas. For example:

The $222 cost of a monthly ticket from Yonkers to Grand Central Station is now fully covered by the benefit, but only 58% of the monthly cost would have been covered if the benefit were not extended. Without an extension of the benefit, a commuter from Yonkers would lose $92 in tax deductions a month, or $1,004 in 2016.

The $249 cost of a monthly ticket from White Plains to Grand Central Station is now fully covered by the benefit, but only 52% of the monthly cost would have been ‎covered if the benefit were not extended. Without an extension of the benefit, a commuter from White Plains would lose $119 in tax deductions a month, or $1,428 in 2016.

The $343 cost of a monthly ticket from Peekskill to Grand Central Station is now mostly covered by the benefit, but only 37% of the monthly cost would have been covered if the benefit were not extended. Without an extension of the benefit, a commuter from Peekskill would lose $125 in tax deductions a month, or $1,500 in 2015.



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