Transit users whose employers provide pre-tax benefit programs stand to pay less taxes in 2012 and 2013. Photo by Erin Nekervis.
January 1st always comes with new laws. This January 1st was a little different than most in that the United States was closing in on the “fiscal cliff”. The American Taxpayer Relief Act of 2012 is expected to be signed into law by President Obama and includes provisions that raise taxes on a majority of Americans, and prolongs extended unemployment benefits, among other changes to the tax code. A major change, fought over for years by sustainable transportation advocates, is the coming yearlong parity of the transit commuter benefit with the parking benefit. These two programs deduct the cost of a monthly transit or parking pass before calculating taxes owed (“pre-tax benefit”).
The American Public Transportation Association released a statement:
For 2013, there is no longer a financial bias in the federal tax code against public transit use. This has always been an issue of fairness, and public transit advocates are pleased that the federal tax code will again provide transit riders with the same tax benefits according to those who drive to work.
The change will be retroactive to January 1, 2012, so workers whose employers implement this program will be able to receive tax benefits for any passes they purchased through the program last year. Unfortunately, the benefit expires December 31, 2013. This isn’t the first time that the transit commuter benefit will expire while the parking benefit remains. The American Recovery and Reinvestment Act (ARRA 2009, also known as the “stimulus”) raised the transit commuter benefit from $120 to $230 per month, but that expired on December 31, 2011. The parking benefit remained at $230 per month.
Continue reading Transit benefit reaches parity with parking benefit, plus other new laws
Drive? Drive! Photo by Dan O’Neill.
I’m not going to try to make sense of the pending Chicago Transit Authority fare increases, why they’re necessary, or of Rahm’s insensitive remarks on Monday that he clarified yesterday. There are already great responses on these matters:
You will have to figure out for yourself if it’s still worth it to buy single or multi-day passes. Need a primer on what’s proposed to change? Check out the CTA’s FAQ (.pdf). The fare increases will be voted on by the CTA board on December 18, 2012, at 2:30 PM, and the increases would take effect January 14, 2013.
I’m going to try and inspire you to take action and give you some tools that may help lessen the impact on your household’s finances. Here are 12 ideas.
1. Illinois legislators control the CTA so you have to tell them how you feel about fare increases and transportation subsidy policies. They decide how much financial assistance transit agencies will get. Tell them which way you tend to vote. You can find their contact info on the Riders for Better Transit website.
2. There are pre-tax benefits available at supportive workplaces. Money is removed from your paycheck to purchase a cash transit card or a monthly pass before taxes are calculated. You can save hundreds of dollars per year. This applies to Metra and Pace riders, too. You cannot get this benefit individually: your employer most offer it. If they don’t, give your boss or HR manager this information. Learn more at LessTaxingCommute.com.
If you get pushback, educate your coworkers or contact Metropolitan Planning Council (MPC) and Riders for Better Transit to see if they can help you reach out to company executives.
3. The mayor of Chicago and the governor of Illinois appoint four and three members to the CTA board, respectively. Direct your attention to those two.
4. The budget recommendations for the following budget year (2013) are created by CTA president Forrest Claypool and his staff and then presented to the appointed board members for their approval. If I kept better track of the board’s activity I could tell you if they’ve ever told the CTA president to revise the budget recommendations. You can speak to the board at two public meetings in December: Continue reading Moving beyond the shock of CTA fare increases to doing something about it