House tax bill revives transit break, but only temporarily

House tax bill revives transit break, but only temporarily

A House bill to preserve tax breaks that are scheduled to expire at the end of year includes an extension of a benefit for commuters who take public transportation to work that was cut at the beginning of this year, but only for a couple of weeks. 

The measure, which has been dubbed the “Tax Increase Prevention Act Of 2014” (H.R. 5771), would increase the amount of their monthly incomes that transit riders are allowed to set aside before taxes for their commutes to work from $130 to $245, but only until the end of 2014. 

The transit tax break was cut in half in January over the objection of public transit advocates who argued that a similar tax break for drivers who park in garages was left unchanged.


The House Ways and Means Committee said in a summary of the tax legislation that transit provision “would extend through 2014 the maximum monthly exclusion amount for transit passes and van pool benefits so that these transportation benefits match the exclusion for qualified parking benefits.” 

Transit advocates have been pushing Congress to restore the transit break before the conclusion of the lame-duck session that is expected to conclude in a couple of weeks, but they had hoped lawmakers would make the commuter benefit permanent instead of passing another temporary extension. 

“We're very disappointed. Even the previous proposal through 2015 would've been helpful, but you can't retroactively use [the commuter tax break] under the benefit law, American Public Transportation Association (APTA) Vice President of Government Affairs Rob Healy told The Hill in an interview on Tuesday evening. 

“We would love to have equity [with the parking benefit] made permanent, but at least a one year [extension] through 2015 would've been helpful," Healy continued. "This won't do anything for commuters who use the benefit." 

The transit tax break was originally increased to $240 in the 2009 economic stimulus package. The benefit was reduced when the stimulus ended in 2011, but it was later restored in the 2012 bill to push back the implementation of sequestration until early 2013.

The extension was only for one year, however, so the benefit returned to $130 again on Jan. 1.

The provision in the House’s current version of the tax extender legislation would only increase the commuter benefit to its pre-2014 levels for the remainder of this year.

Healy said the transit community would continue pushing for an extension of the commuter tax benefit beyond the end of this year and hoped for better lucked with the Democratically-controlled Senate. 

"We'll continue shooting for a permanent extension," he said. "Nobody's going to sign up and take the benefit [for 2014]. It's even after the first of the month." 

-This story was updated with new information 6:07 p.m.