Commuters who take mass transit may save more than $1,000 a year if a bill passed out of the U.S. Senate Finance Committee becomes law.
U.S. Sen Charles Schumer, D-New York, successfully inserted a provision into a senate transportation bill that would allow bus, subway and rail commuters to deduct up to $240 of their commuting costs from their paychecks, tax free, through an employee benefit program.
Essentially, that would allow those commuting costs to be paid for with tax-free dollars, saving travelers money. The provision would reinstate and increase a previous benefit that expired in December. It would apply retroactively to January 1 and run through 2013.
The original legislation was passed in 2009 when the mass transit benefit was doubled from $120 per month to $230. Schumer’s press release said that increase saved commuters $1,000 annually and cut their transportation costs by a third or more.
The bill will be sent to the floor of the Senate but would need support in the House.
From Schumer’s press release:
According to Transit Center, in the New York metro area, commuters saved over $200 million last year because of the transit benefit and employers have saved over $45 million since the benefit went into effect in the New York area. Approximately 15,000 companies in New York offer the transit benefit covering more than a half a million employees. And in 2010, employers nationwide saved about $300 million in payroll taxes, money that can be reinvested to create jobs.
To read the full release, click here.
Photo: File photo (Stephen Schmitt / The Journal News)