From 2009 through 2014, public transit riders and drivers who paid for parking near their place of employment were able to pay, on a pre-tax basis, the same amount for eligible transit or parking expenses. The monthly benefit cap rolled back to a lower level for public transit at the end of 2014 to the current level of $130 because legislation was not extended. However, the parking benefit monthly cap remained at $250 for 2015 and, as we recently shared, the parking benefit monthly cap increases to $255 for 2016, while the transit monthly benefit limit remains at $130. This drop in the transit benefit cap cost many middle class commuting Americans hundreds of dollars in lost annual tax savings and also reduced employer payroll tax savings.
The Commuter Parity Act of 2015 (H.R. 990), introduced earlier this year by Rep. Peter King (R-NY) and cosponsored by a bipartisan mix of 37 Members of the House of Representatives, would permanently produce parity by raising the amount of pre-tax dollars to $235 that public transportation customers could use to pay for their monthly commuting costs. In order to fund this increase, under the bill, the amount motorists could pay on a pre-tax basis for monthly parking costs would fall from $250 to $235. This bill results in a $130 million deficit reduction over the next ten years.
Senator Chuck Schumer (D-NY) also introduced a bill in the Senate entitled The Commuter Benefits Equity Act of 2015 (S. 1792) which amends the Internal Revenue Code to equalize and increase the monthly tax exclusion for both transit and parking benefits to $250. Both bills include a cost-of-living adjustment for subsequent calendar years.
As Congressional conferees seek to finalize the Highway Transit Bill over the coming days, now is the time to permanently address this important issue.
You can help us to accomplish our shared goal of achieving permanent parity by visiting our coalition website at www.commuterbenefitsworkforus.com and letting your elected officials know of your support. To date, we have generated nearly 150,000 letters to Congress--your voice makes a difference!
On behalf of our clients and their employees, WageWorks continues to lead efforts to achieve permanent parity between the monthly transit benefit cap and the monthly parking benefit cap.
We will continue to keep you apprised of events as they unfold on this important issue.
Click here for a downloadable copy of this report.