[flickr]photo:5534222538[/flickr]
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