SCHUMER: MOST LONG ISLANDERS ENTITLED TO LARGE TAX BREAK FOR MASS TRANSIT BUT DON’T KNOW IT; SCHUMER, WHO SUCCESSFULLY INCLUDED COMMUTER BENEFIT IN RECENTLY-PASSED FED LEGISLATION, TELLS LIRR RIDERS ABOUT BENEFIT & URGES SIGN UP; COMMUTERS CAN SAVE OVER $1,000 PER YEAR
Over 300K Commuters Who Take LIRR Daily Are Eligible to Receive Now-Permanent Commuter Tax Break—But Some Don't Know About The Benefit Or How Easy It Is To Access
Schumer Successfully Pushed to Reinstate & Extend Commuter Benefit At Rate of $250 for 2015 and $255 for 2016 in Monthly Pre-Tax Savings; Legislation Now Provides Permanent Savings Commuters Can Bank On
Schumer: Mass Transit Users Should Get On Board With Commuter Tax Benefit So They Can Put The Savings To Good Use
U.S. Senator Charles E. Schumer today announced that the recently passed 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 1st 2015, dropping the mass transit pre-tax savings to only $130. With Schumer’s successful push, a provision establishes permanent parity between the mass transit and parking benefit was included in the recently passed tax extenders package. 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 LIRR, an average of 301,000 customers use the commuter railroad each weekday; Schumer said that with the passage of this legislation these customers would be eligible for higher tax deductions to save them hundreds of dollars a year. Schumer, who was the original author of the legislation that provided parity between the mass transit and parking benefits, said that this benefit will put tax savings back into the pockets of residents in Nassau and Suffolk counties, and will once again give LIRR 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.
“This is a huge victory for Long Island’s mass transit commuters that can save them hard-earned dollars on their expensive commutes. As the price of commuting continues to climb, this commuter tax break has become increasingly vital for Long Island residents, who already experience a very high cost of living. Mass transit is the lifeblood of Long Island and the greater New York City area, and that’s why I pushed so hard to have the federal transit benefit included in this must-pass bill,” said Schumer. “The recently-passed Protecting Americans From Tax Hikes Act, known as the ‘tax extenders’ bill would provide much-needed parity between the commuter benefit and the parking benefit.”
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. Schumer said the benefit in 2013 covered up to $245 per month from a person’s wages to help pay for their mass transit commutes and provided parity with a previous benefit extended to drivers’ parking costs. In 2013 alone, approximately 700,000 New York area commuters saved over $330 million through this benefit.
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 2015. 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-passed tax extenders bill fixes this inequality and extends the parity.
Schumer said that the mass transit benefit covers a large portion of the typical monthly pass from LIRR commuting areas. For example:
The $252 cost of a monthly ticket from Mineola to Penn Station is almost fully covered by the benefit, but only 51% of the monthly cost would have been covered if the benefit had not been extended. Without an extension of the benefit, a commuter from Mineola would have lose $120 in tax deductions a month, or $1,440 in 2015.
The $377 cost of a monthly ticket from Ronkonkoma to Penn Station is 66% covered by the benefit, but only 34% of the monthly cost would have been covered if the benefit had not been extended. Without an extension of the benefit, a commuter from Ronkonkoma would lose $120 in tax deductions a month, or $1,440 in 2015.
The $485 cost of a monthly ticket from Riverhead to Penn Station is 51% covered by the benefit, but only 27% of the monthly cost would have been covered if the benefit had not been extended. Without an extension of the benefit, a commuter from Riverhead would lose $120 in tax deductions a month, or $1,440 in 2015.
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