Tax break could help Metro-North riders

 

Tax break could help Metro-North riders

WASHINGTON — Buried deep within the tax-and-spending packages agreed to by Congress last week is a commuter tax benefit that could potentially save Metro-North riders substantial sums in annual commuting costs.

Since  first approved by Congress in 2009, the mass-transit benefit has taken a seesaw ride year by year, leaving employers and employees puzzled over what (if any) benefits they could derive from it.

Now commuters can count on receiving a $255 monthly break in pre-tax savings from employers in 2016. The benefit is permanent and puts mass-transit commuters back on par with drivers who pay for parking.

The mass-transit benefit had been allowed to expire on Jan. 1, 2015, dropping the tax break for rail and bus commuters to $130 a month — $120 less than the $250 break driving commuters received in 2015 for parking fees.

Parity could benefit the region in terms of cleaner air, and less congestion and wear and tear on the roads, said Sen. , Richard Blumenthal D-Conn., a member of the Senate Commerce, Science & Transportation Committee.

“A lot of folks may have been driving because they were in effect being subsidized for it, whereas the rail commuter derived a smaller benefit,’’ he said. “It could be kind of a tipping factor in the decision commuters make on whether to get in a car and go through a nightmarish ride to work or go to a rail station.’’

Whether parking or mass transit, the subsidy is treated as a pre-tax benefit. Employees receiving it then report less taxable income to the IRS and either pay less in taxes or receive a bigger refund.

 

MTA chairman  Thomas Prendergast last week said the mass-transit break is “good news’’ for the system’s commuters.

Author: Harlem Valley News

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