December 21st, 2015
After a quarter century of imbalanace in tax benefits for car commuters versus transit commuters, Permanent Commuter Benefit Parity has become a reality. The end of year tax deal has recently been signed into law now includes a provision that makes permanent transit benefit parity- meaning that the monthly cap on pre-tax transit, vanpool, and parking will increase EQUALLY to $255/month starting January 1st, 2016. The deal also retroactively sets that transit/vanpool cap at $250/month for 2015.
Without congressional action, the Transit Benefit cap was only $130, while the Parking Benefit cap was a whopping $255.
This is a huge win for all commuters, specially those who have been paying for transit tickets well above the cap.
What will you do with your extra tax savings?
More on retroactive benefits.....
The legislative text once again includes retroactive benefits. What does this mean? If you (as an employer) allowed employees to withhold above the cap and purchased fare media for them with taxable dollars, you will be able to retroactively apply the $250/month cap for 2015. Again, this only applies to those employees and employers who withheld above the cap. If employees used their own money to buy fare media the new cap does not apply (even if they have receipts or other proof of purchase).