Tucked into the massive federal spending and tax-cut agreement reached by congressional leaders this week is a measure that will save New York mass-transit commuters hundreds of dollars apiece each year. Employers will save as well.
The provision nearly doubles the maximum amount of pre-tax income they can use to pay transit fares. Currently $130 a month, the limit will be raised to match the amount that people who drive to work can spend in untaxed earnings on parking fees—$255 per month in 2016.
Moreover, just like the parking benefit, the transit break will be permanent and will rise annually with the cost of living if Congress passes the mammoth bill as expected.
The biggest beneficiaries will be high earners who regularly take the Long Island Rail Road or Metro-North and spend at least $255 a month on fares. By participating in a commuter-benefit program such as TransitChek offered by their employers, they will be able to spend $3,060 annually in untaxed income on fares, up from $1,560—yielding a tax savings of about $1,200 instead of $625 for someone in the highest income-tax bracket.
The reduction in taxable income lessens employers’ payroll taxes, such as Social Security and Medicare. It adds up to 7.65% of what their workers spend in pre-tax money. It is nearly always greater than the $5 to $7.50 per employee per month that businesses pay a third party, such as WageWorks, to administer the program. But businesses with low participation rates among employees could end up paying more than they save.
Sunday, December 20, 2015
Mass transit commuters to save more $
Posted by Queens Crapper at 12:47 AM
Labels: commuters, congress, tax credit, transit, transitchek
about time they brought this back
It will be called ObomaFare.
It will be called ObomaFare
What the hell are you talking about? This is a remuneration of tax money back to the people it was taken from - you know, people who actually WORK! It's a good thing.
Post a Comment