Federal Commuter Tax Benefit To Be Reduced In 2012
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A popular commuter tax break is about to be cut come the new year.
The federal commuter tax benefit, which allows commuters to deduct mass transit expenses pre-tax, is being cut nearly in half.
Commuters are currently able to deduct $230 per month in mass transit expenses through programs like Transitchek and WageWorks.
But come January 1, the maximum monthly benefit drops to $125.
That means a commuter earning $50,000 and spending $230 a month on transit will pay an extra $400 in 2012.
Senator Charles Schumer fought earlier this year to maintain the higher tax benefit but Congress left for the holidays without approving an extension.
Those who drive to work will be able to use $240 of pre-tax income to pay for parking.
The commuter tax breaks benefit more than a half-million transit riders, saving them more than $200 million.