HOBOKEN – With the federal public transportation benefit set to be drastically reduced at the end of the month, U.S. Senator Robert Menendez (D-NJ) criticized Republican action earlier in December to block the extension of this critical tax break which saves New Jersey commuters more than $1,000 a year. Last week, Republicans refused an effort by New York Sen. Chuck Schumer to pass an extension of the benefit.
“New Jersey’s economy relies on transit and we must make sure it’s not only reliable, but affordable. Not only should we extend this benefit, but we need to make it permanent,” said Menendez.
“With so many New Jerseyans dependent upon public transportation, it is critical that these benefits are extended in order to make sure commuters are getting the tax breaks they deserve,” said Rep. Albio Sires (D-NJ).
Employees whose monthly mass transit fees are less than $245 can currently deduct the full amount of their commuting costs from their paychecks, tax free, through an employer benefit program. The cost is pegged to the IRS tax benefit that covers parking for drivers. Until 2009, commuters who drove to work received a greater tax break than those who took public transit. In 2009 the public transit benefit was almost doubled from $120 per month to $230 per month, creating a savings of over $1,000 per year for commuters. Currently 2.7 million commuters nationwide take advantage of the benefit.
By failing to pass legislation to preserve equity between the tax treatment of transit benefits and benefits for parking, when current law expires on Dec. 31, 2013, the transit commuter benefit will drop from $245 to $130 per month, while the parking benefit is automatically adjusted up to $250 per month.
Connect with NJTODAY.NET
Join NJTODAY.NET's free Email List to receive occasional updates delivered right to your email address!