Fiscal cliff deal restores transit benefit
Photo by thisisbossi on Flickr.
Congress reached a deal to avert the so-called “fiscal cliff,” and transit riders get a bonus: the Senate included a provision raising the federal transit benefit to $240 per month.
Today, employers can offer their workers a pretax deduction for transit of up to $125 per month, and some employers, including the federal government, will give that much in transit fare to workers outright as an extra perk. The benefit was $230 per month until the beginning of last year, when a provision in the law expired and it reset to a lower level.
There’s a similar benefit for parking costs, but workers can deduct more than for transit — up to $240 per month since the start of 2012. Some members of Congress had been trying to restore parity between transit and parking benefits, and got it into the Senate’s transportation bill in March, but the provision didn’t survive into the final bill.
The bill Congress just approved for the “fiscal cliff” contains this provision, meaning benefits go up to $240 per month, several people have confirmed. Unfortunately, it’s still only temporary, as this new level expires again at the end of 2013 unless Congress extends it once more.
Technically, the new level is also retroactive until the start of 2012, but unlike with tax credits you can claim on this April’s taxes for activities in 2012, there’s no way for riders to realistically take advantage of it for months gone by.
Tom Bulger, a WMATA board member and lobbyist who’s been pushing for the extension, noted that Congressional Republicans had been strongly opposed to any changes in law that increase any taxes, including letting previous tax cuts expire, but hadn’t extended that same passion to the transit benefit.
Even if House Republicans just went along somewhat reluctantly with a Senate deal yesterday, in approving this extension, they were now able to give many American workers a tax cut along with helping our cities function more effectively and ending one small example of the many ways government “picks winners and losers” among transportation modes.