COMMUTER BENEFITS SET TO DECLINE IF NO ACTION IS TAKEN

28-Oct-2011

Last fall we faced the threat of reduced commuter benefits, but an extension saved the benefits at current levels for another year. It is that time of the year again and the IRS reported last week that the maximum tax free levels for qualified transportation fringe benefits for transit and commuter highway vehicles – such as vanpools – are scheduled to decline from $230 to $125 in 2012.

Florida’s Center for Urban Transportation reported that under the American Recovery and Reinvestment Act (ARRA) [stimulus], the monthly tax exclusion for employer-provided commuter highway vehicle transportation and transit pass benefits increased to $230, effective from March through December 2009. However, the “sunset” date had been extended and the current end is December 31, 2011. See http://www.irs.gov/newsroom/article/0,,id=205664,00.html

The Parking tax free limit was $230 per month before the stimulus funds so it will remain the same, with the exception of an inflation adjustment that will increase the benefit by $10 per month. The transit/commuter benefit was $110 per month before the stimulus funds, and with no action would be $115 per month, to account for inflation. The reduced commuter benefit may encourage commuters to get in their cars again and take advantage of the parking benefit – which leads to increased congestion, pollution, gasoline consumption.

CTAI wrote a letter to our Congressional Delegation which can be viewed here.

For those interested in telling Congress to extend or make permanent the transit and vanpool benefit cap at $230 per month, please see www.commuterbenefitsworkforus.com  


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