Commuter Tax Benefit Set to Expire
Tax break benefits thousands of local residents.
A commuter tax benefit popular in the Washington area is set to expire at the end of this year if Congress fails to renew the tax break.
The Commuter Tax Benefit program, a federal mass transit tax benefit, allows workers to use up to $230 in pre-tax income each month for mass transit or vanpooling. An estimated 2.7 million Americans currently benefit from the program, with a 10th of those commuters living in the Washington area, said Tom Bulger, a board member with the Washington Metropolitan Area Transportation Authority.
The Washington metro area has the single largest number of commuters receiving the benefit, Bulger said. If the benefit is not extended, Metro estimates a 2.8 percent reduction in rail ridership.
“I think a lot of people would switch to singe occupancy cars, thereby exacerbating our congestion levels, which are the highest in the country,” Bulger said.
Employees using the transit benefit can save up to $1,200 annually.
The tax benefit was formerly $120 per month until Congress increased it in 2009 as part of the American Reinvestment and Recovery Act. Last year the benefit was extended through the end of this year. If Congress fails to act, the benefit will fall to $125 per month.
However, a parking benefit is set to rise to $240 per month, allowing for cost of living increases, although the parking benefit and commuter benefits are currently equal. Sen. Charles Schumer, D-N.Y. and Reps. Earl Blumenauer, D-Ore., and James McGovern, D-Mass., have each introduced bills in the House to maintain parity between the two benefits.
Jason Pavluchuk, a consultant and lobbyist for the Association for Commuter Transportation (ACT), said the loss of the commuter benefit would likely mean one in five people now using it would switch to a solo commute.
“When you’re talking about a 20 percent shift, it’s pretty significant,” he said.
Chris Simmons, ACT vice president, said his organization wants parity between the parking and commuter benefits. The commuter benefit is often offered as a perk for jobs in urban locations, he said, although it is also used for vanpooling in remote locations.
“It’s been successful in encouraging folks to find a different way,” Simmons said.
Commuting by mass transit or vanpooling, he said, is not only better for the environment, but over time is more efficient and less costly than solo vehicle commutes.
Bulger said commuters who are interested in having the commuter benefit extended should visit the website www.commuterbenefitsworkforus.com for guidance in taking action.