'Cliff' bill restores commuter tax break

The legislation that was passed by Congress this week to resolve avert the "fiscal cliff" included a long-sought increase in the tax benefits that are given to people who use public transportation systems to get to work

Transportation advocates had pushed since 2011 to increase the amount public transit riders are allowed to withhold from their paychecks per month from the deductible income on their taxes for their trips to work.

Until the conclusion of the 2009 economic stimulus in 2011, the benefit for transit commuters had been roughly equal to the one given to workers who drive: $230.

ADVERTISEMENT
But the transit benefit reverted to $125 at the beginning of 2012, while while the benefit for parking was adjusted to $240 dollars.

Lawmakers had tried to the commuter benefit back to its 2011 levels in the $105 billion transportation bill that was approved by lawmakers last summer, but the provision was eliminated during conference negotiations with the House and Senate.

The union for public transit workers, the Amalgamated Transit Union (ATU), said on Wednesday the inclusion of the increase in the bill that was passed to avert the large package of spending cuts and tax increases that was known as the fiscal cliff was long overdue.

“We applaud Congress for increasing this commuter tax benefit that will provide much needed financial assistance to working families,” ATU International President Larry Hanley said in a statement. “The average American family devotes nearly 20 percent of its income to transportation – second only to housing. The increase in this benefit means they have one less expense to worry about, and in today’s economy, every dollar counts.”

Hanley said the restoration of the pre-2012 levels of the commuter tax had more benefits than just encouraging public transit usage.

"This tax benefit encourages more people to use public transportation, which has many environmental, social and economic benefits," he said. “When people take public transit, there are fewer cars stuck in traffic, decreased pollution and less dependence on foreign oil."

“The transit benefit is good for the community, our economy and our environment,” Hanley continued. “We look forward to working with Congress to make this a permanent benefit for commuters.”