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U.S. Senate Voting on $230 Monthly Commuter Tax Benefit

Tuesday, December 14, 2010 - 04:22 PM

(New York--Jim O'Grady, WNYC) The U.S. Senate is voting today on a tax cut compromise that includes a provision allowing transit riders to deduct up to $230 per month for the cost of their commute.

The move would be a big step toward extending a benefit that began last year as part of the Obama administration's federal stimulus package. Before then, a transit commuter's monthly pre-tax benefit was capped at $120. Raising the cap to $230 put bus and train riders--and van poolers--on par with those who drive to work and pay for parking.

Tri-State Transportation Campaign, an advocacy group that works in Connecticut, New Jersey and New York, has been pushing the provision. Spokeswoman Ya-Ting Liu said, "At the end of the day, given the growing need for affordable transportation options, and the growing economic cost of traffic congestion, fed policy should reward transit use. And that’s exactly what this does."

After the Senate vote, the tax package compromise will be taken up by the House. Should it pass there, the House and Senate would need to come up with a reconciled bill and then pass that bill before the end of the year.

Liu said the yearly suspense over the $230 benefit for transit riders could be avoided if the provision were to be written into the tax code, as it has been for drivers.

"The underlying issue is parity between transit and parking," she said. "Right now, this is a permanent benefit that only drivers enjoy."

For more on the issue and its economic ramifications, see this Marketplace report.

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