By Philip Newman
U.S. Sen. Charles Schumer (D-N.Y.) has warned that a federal tax advantage saving each mass transit user in the New York metropolitan area at least $1,000 a year could expire at the end of this year.
“We cannot let the transit benefit get knocked off the tracks,” Schumer said. “New York commuters need every tax break they can get.”
What could be in jeopardy is the Commuter Parity Act of 2013, provisions of which allow public transit users to pay for the cost of their commutes with up to $245 in pretax dollars monthly through company administered programs like WageWorks.
If the tax advantage is not extended, the allowable amount of deductible would fall to $l30 a month, which is the pre-2013 figure, along with a small inflation increase starting Jan. 1, 2014.
Schumer noted that the current $245 per month benefit fully covers the monthly cost of riding all major mass transit systems in New York City, including subway, bus, express bus and most of Metro-North Railroad and Long Island Rail Road commuting costs.
The tax benefit has been used by more than 700,000 riders of mass transit in the Metropolitan Area for a savings of at least $330,000 since Jan. 1, 2013, according to figures calculated by Schumer’s staff.
“As the price of commuting continues to climb, this tax break has become increasingly vital,” Schumer said. “Mass transit is the lifeblood of the New York area and this provision helps keep it flowing and affordable.”
Schumer acknowledged that members of Congress from states that have little or no mass transit might oppose extending the Commuter Parity Act by two years.
“Nevertheless, we are going to do everything we can to get it done by Dec. 31,” Schumer said.
Approximately 15,000 companies in New York offer the transit benefits covering some 700,000 workers.
Straphangers are in line for some relief, however. The MTA released a financial plan Wednesday that showed it is cutting its proposed fare hikes for both 2015 and 2017 to 4 percent from 7.5 percent. “This is good news for riders, especially working and middle-class New Yorkers who are already struggling to stay in the city,” said John Raskin, head of the Riders Alliance.
Reach contributing writer Philip Newman by e-mail at email@example.com or phone at 718-260-4536.