Cliff Notes: Transit Riders Get a Break

Little noted in the recent federal fiscal cliff drama, people who take transit to work again are eligible for commuter tax breaks roughly equal to those for drivers. Since the beginning of last year, the cap on transit riders' pretax accounts for fare expenses had dropped by nearly half to $125 a month, compared with $240 for parking, which remained untouched.

After this imbalance was not corrected in the $105 billion federal transportation bill enacted last summer, it became a small part of the New Year's Day deal to avert large tax increases and spending cuts. Now transit commuters can again spend up to $230 a month on fares from pretax income, the level from 2009 through 2011.

The Amalgamated Transit Union applauded the move, which it said "will provide much needed financial assistance to working families ... This tax benefit encourages more people to use public transporation, which has many environmental, social and economic benefits ... We look forward to working with Congress to make this a permanent benefit."

If it isn't made permanent, policymakers should take a hard look at the tax break for parking, too. For the past year, the tax code has been one more government incentive, among many, for commuters not to consider the economical transit option.

Posted in Transportation | Related Topics: Public Transportation 

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