SCHUMER ANNOUNCES PERMANENT EXTENSION OF VITAL TAX BENEFIT FOR MASS TRANSIT COMMUTERS INCLUDED IN JUST-UNVEILED MUST-PASS TAX PACKAGE; LEGISLATION REINSTATES EXPIRED “MASS TRANSIT TAX BENEFIT” THAT CAN SAVE METRO-NORTH AND OTHER WESTCHESTER, ROCKLAND AND ORANGE AND LOWER HUDSON VALLEY MASS TRANSIT COMMUTERS OVER $1,000 PER YEAR
170,000 Westchester, Rockland & Putnam Commuters Who Take Metro-North Each Day Were Eligible to Receive Up to $250 in Pre-Tax Savings in 2014 On Metro-North Commute Every Month Until the Provision Expired Jan 1st of This Year, Dropping Monthly Savings to $130
Schumer Successfully Pushed to ?Include Permanent Extension of Mass Transit Benefit At Same Rate as Parking In Must-Pass Bill; Would be $250 for 2015 and $255 for 2016 in Monthly Pre-Tax Savings Providing Much-Needed parity Between Commuters Who Drive & Those Who Use Mass Transit 2015 and 2016
Schumer: If Legislation Passes, Commuters Who Take Metro-North, Busses and NJ Transit To Work Would Once Again Get Same Benefit As Those Who Drive
U.S. Senator Charles E. Schumer today announced that the just-unveiled must-pass tax extenders package, the Protecting Americans From Tax Hikes Act of 2015, includes an extension of the “mass transit tax benefit,” which would provide $250 per month for 2015 and $255 for 2016 in pre-tax savings to help cut costs for mass transit commuters. Parity for the parking and mass transit benefit expired on January 1st2015, dropping the mass transit pre-tax savings to only $130. With Schumer’s successful push, a provision that would establish permanent parity between the mass transit and parking benefit was included in the tax extenders package. If passed, qualifying mass transit commuters would be able to receive up to $250 per month for 2015 and $255 per month for 2016 in tax deductions, with a cost-of-living adjustment after 2015. According to the Metro-North, an average of 170,000 customers use the commuter railroad each weekday; Schumer said that with mass transit parity, these customers would save hundreds of dollars year. Schumer, who was the original author of the legislation provided parity between the mass transit and parking benefits, said that this benefit would put tax savings back into the pockets of residents in Westchester, Putnam and Rockland counties, and would once again give Metro-North commuters the same tax break that those who commute by car receive for parking costs. Currently an individual making $60,000 of taxable income taking the current full mass transit deduction would only be able to save $390 a year. With Schumer’s provision providing parity between the mass transit and parking benefits, that same individual would be able to save $765 next year taking the full mass transit deduction, a savings of $375.
“As the price of commuting continues to climb, this commuter tax break has become increasingly vital for Westchester and Lower Hudson Valley residents, who already experience a very high cost of living. Mass transit is the lifeblood of the Hudson Valley and Greater New York City area, and that’s why I pushed so hard to have the federal transit benefit increased and extended permanently,” said Schumer. “The recently-unveiled Protecting Americans From Tax Hikes Act, known as the ‘tax extenders’ bill, would provide much-needed permanent parity between the commuter benefit and the parking benefit and will save real money for countless commuters.”
Schumer was the initial author of the legislation that provided parity between the mass transit and parking benefits, and it was first passed as part of the stimulus package. This benefit is a tax deduction available to commuters who receive fringe benefits from their employer for riding the bus, taking the subway or using another form of public transportation to commute to work. The benefit has saved many mass transit riders over $1,000 per year.
In 2009, the mass transit benefit was almost doubled, jumping from $120 per month to $230 per month and creating a savings of over $1000 per year for many commuters. In 2013, 700,000 commuters in the Greater New York Metropolitan Area, and 2.7 million commuters nationwide took advantage of the benefit. However, the benefit expired on January 1st, 2015 and Congress failed to extend it through 2014. Schumer authored legislation that passed as part of the economic stimulus package in 2008, allowing employers to offer their employees up to $230 per month in transit benefits tax free, equal to what they were offering tax-free for parking costs. The transit benefit can reduce a commuter’s transportation costs by a third or more. Because the benefit had not been reinstated and extended into 2015, there was a create a greater incentive for people to drive to work rather than take mass transit, as the $250 pre-tax savings only applied to those who drive, while the transit benefit has been only $130. Schumer said that the more people who commute via mass transit, the better it is for the environment and for keeping traffic down for those who do commute by car. Schumer explained that the recently-unveiled tax extenders bill fixes this inequality and extends the parity.
During his visit to Westchester, Schumer said that the mass transit benefit covered a large portion of the typical monthly pass from Metro North commuting areas. For example:
The $222 cost of a monthly ticket from Yonkers to Grand Central Station was fully covered by the benefit, but only 58% of the monthly cost would be covered if the benefit is not extended. Without an extension of the benefit, a commuter from Yonkers would lose $92 in tax deductions a month, or $1,004 in 2015.
The $249 cost of a monthly ticket from White Plains to Grand Central Station was also fully covered by the benefit, but only 52% of the monthly cost would be covered if the benefit is not extended. Without an extension of the benefit, a commuter from White Plains would lose $119 in tax deductions a month, or $1,428 in 2015.
The $343 cost of a monthly ticket from Peekskill to Grand Central Station was 72% covered by the benefit, but only 37% of the monthly cost would be covered if the benefit is not extended. Without an extension of the benefit, a commuter from Peekskill would lose $120 in tax deductions a month, or $1,440 in 2015.
The $500 cost of a monthly ticket from Wassaic to Grand Central Station was 50% covered by the benefit, but only 26% of the monthly cost would be covered if the benefit is not extended. Without an extension of the benefit, a commuter from Wassaic would lose $120 in tax deductions a month, or $1,440 in 2015.
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