Transit commuters got a happy new year’s gift yesterday. They will now be able to claim as much in tax benefits as car commuters do in 2013. The legislation that averted the so-called fiscal cliff included a provision that will once again re-establish parity between the parking and transit benefits at $245/month. The provision is effective immediately and is set to expire at the end of 2013.
Today, employers can offer their workers a pretax deduction for transit of up to $125 per month, and some employers will give that much in transit fare to workers outright as an extra perk. The benefit was $230 per month until the beginning of last year, when a provision in the law expired and it reset to a lower level.
There’s a similar benefit for parking costs, but workers can deduct more —up to $245 per month.
The bill Congress just approved for the fiscal cliff contains this provision, meaning benefits go up to $245 per month. Unfortunately, it’s still only temporary, as this new level expires again at the end of 2013 unless Congress extends it once more. But at least for the time being, transit and parking benefits are equal, and people have one less financial incentive to drive alone to work.