WASHINGTON D.C. – New Jersey Senators Robert Menendez and Frank Lautenberg, both Democrats, joined 20 other legislators in a bipartisan letter to the Senate Finance Committee last week, urging the committee to extend a tax benefit for bus and train riders. The benefit would revert back to $125 a month as of Jan. 1, if the higher $230 a month figure is not reauthorized.
The Senators wrote:
“As you know, in 2009 Congress raised the tax-free benefit that workers could apply toward monthly commuting costs, from $120 per month up to $230 per month, putting transit benefits on par with parking benefits. This important benefit eases the burden of commuting costs on families, relieves congestion, reduces the stress on our highway system and decreases our reliance on foreign oil.”
“The increase in the transit benefit cap to $230 per month is set to expire at the end of 2011 and return to $125 per month with the recent IRS cost of living adjustment. That would represent a significant tax increase for middle-class commuters and their employers, who currently do not have to pay federal payroll taxes on the amount of the benefit.”
It is estimated that thousands of commuters in New Jersey alone could be affected. For example, train fare from New Brunswick to New York Penn Station costs $361 a month. For that commuter, extending the higher benefit would mean a tax savings of over $1,500 a year.
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