Fiscal cliff deal restores commuter tax benefit to $240 a month
January 21, 2013By By Amy DiPierro and Emma Chapple
In the fiscal cliff deal earlier this month, Congress nearly doubled the nationwide tax benefit for transit riders.
Commuters now will be able to save up to $240 a month out of pocket to pay for transit expenses. The cap on the tax benefit had been raised under the stimulus package at the beginning of the recession, but it fell to the standard rate of $125 per month in 2012.
SEPTA spokesman Andrew Busch said he can't prove whether the larger tax break has increased transit use, but ridership is up significantly over the last five years.
"We're up 43 million rides in that time," he said. "We're sure that people taking advantage of this program, that's definitely helping us with our ridership."
It's hard to measure its effect because other factors -– including unemployment -– affect the number of riders, says Dan Neuburger, president of WageWorks Commuter Service, one of the firms that manages the program for New Jersey Transit. He said 60 perecent of public transit trips are commutes to and from work.
"The use of public transit was flat in 2010 when the stimulus package increased the monthly benefit cap to $230 a month, but that was because of the lingering effects of the recession and relatively low gas prices," he said. "In 2011, when the economy was improving and the commuter benefit cap was at a higher level, we did see an increase. In fact, in the Philadelphia market, we saw an even higher increase of 4 percent."
Neuburger predicted that increasing the monthly cap will again encourage more commuters to take mass transit.
"Commuters can now save up to $1,200 annually on the cost of their commute, and who wouldn't want that much more money in their pocket?" he said.
The expanded benefit may also make public transit more palatable to drivers, since it now matches the one available to commuters paying for monthly parking.
"There's no advantage to parking over transit the way it's set up now," said Busch.
Commuters interested in receiving the tax benefit can enroll in the program through employers.