After a few months of reduced tax credits for all the money they spend getting to and from work, commuters may finally be getting a break. The U-S Senate is expected restore commuter transit benefit worth more than $2,000 annually when it votes on the Transportation bill this week.
Until this year, subway, bus and train riders were able to deduct up to $230-dollars from their pre-tax paychecks to pay their monthly transit bill. The tax credit was administered through an employer benefit program. But that benefit cap dropped to $125-dollars as of January 1st after Congress let it lapse after year-end gridlock.
The Senate tried to restore the benefit last month [February] as part of a payroll tax bill, but all amendments in that bill were dropped as part of a deal to get bipartisan support for it from both parties.
Now Senate leaders have embedded the tax credit directly into the Surface Transportation Reauthorization bill – it is not an amendment.
The legislation would extend the commuter tax credit through the end of this year. It would also increase the credit by $10, to $240. That would give it parity with the existing tax benefit that drivers get each month to offset expenses. Commuter advocates complained that the lower $125-dollar cap was actually a tax increase on commuters, especially in areas with relative high transit costs for commuting, like suburban New York, New Jersey, Washington, and San Francisco.
In New York, the minimum monthly pass for all three of the region’s commuter rail systems costs more than the lower, $125-dollars benefit.
Senator Charles Schumer (D-NY) expects the transportation bill will move forward. “It’s our hope to have this passed by Wednesday at the latest, and now we’re putting a full court press on our colleagues in the House to pass this crucial legislation as well,” he said. Many New York area House Republicans broke with their party over the last version of the Highway bill, because it excluded dedicated funding for public transit. After several unsuccessful tries to pass its own bill, the House, led by Speaker John Boehner (R-OH), is now expected take up the Senate bill, instead of crafting a version of its own.
New York City Mayor Michael Bloomberg said he would lobby House Majority Leader Eric Cantor (R-VA), who is visiting New York City. Bloomberg said he wants some help getting a tax credit for commuters. “You know the highway bill helps you if you drive but it doesn't help mass transit and we're very dependent on that,” said Bloomberg.