Inside a proposed Senate transportation bill is a provision that, if approved by Congress, would reverse cuts to the monthly pre-tax transit benefits available to workers who use public transportation and vanpools.
Max Baucus, D-Mont., chairman of the Senate Committee on Finance, signed off Tuesday on revisions to the Highway Investment, Job Creation and Economic Growth Act of 2012. The bill now includes Sen. Charles Schumer's amendment that would bring to parity the monthly amount that can be set aside tax-free for public transportation expenses and parking costs.
The law would set both amounts at a maximum of $240 per month each for 2012, and it's estimated it could save commuters annual costs of up to an additional $550.
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Last year, the transit and parking benefits were set at equal amounts after an amendment extended legislation that was enacted in 2009. That amendment expired on Jan. 1, and the amount for public transportation, transit passes and vanpooling expenses was capped at $125 per month, while the amount for parking was increased to $240 due to a cost of living adjustment.
"We applaud the leadership of the Senate Committee on Finance for moving to reverse what amounted to a tax increase on hard-working Americans who utilize commuter accounts and public transit to get to work," said Joe Jackson, chairman of Save Flexible Spending Plans and CEO of benefits administration service provider WageWorks, Inc.
Jackson has been a public advocate for restoring parity between parking and transit benefits, and argues accounts for transit benefits saved employers more than $300 million in payroll taxes in 2010.
"The sooner Congress acts to restore this important cost-saving vehicle, the better for commuters who are already paying more out of their pockets for costly commutes to work," Jackson continued.
The Senate committee's proposal would extend parity in qualified transportation fringe benefits for the entire 2012 taxable year. A small win for commuters, however, according to members of a coalition entitled "Commuter Benefits Work For Us," who have been urging Congress to enact permanent parity.
"Tax provisions don't usually expire every year but this is a quirk of the budget and the congressional fights that have been going on, so it's turned into a one-year fight every year," said Dan Corbett, Vice President, Transportation Development at WageWorks and a former staff member for the United States Senate Committee on Environment and Public Works, in an earlier interview with BenefitsPro.
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