RSS icon

Top Stories

Prospects for Boost in Employee Mass Transit Tax Breaks Dim

The history of the higher mass transit tax break goes back to 2009, when lawmakers approved an economic stimulus measure that allowed employees to reduce their taxable salaries by up to $230 a month to pay for mass transit expenses.

February 23, 2012
Recommend (0) Comments (0)
Related Topics: Top Stories - Frontpage, Finance/Taxes, Payroll, Deferred Compensation, Flexible Benefit Plans, Benefit Design and Communication, Scheduling, Telecommuting, Workforce Planning, Latest News
Reprints

The prospects for congressional action to boost the tax-favored status of an employee benefit tapped by those who use mass transit to get to and from work continue to dim.

While the Senate Finance Committee previously approved a highway funding bill that includes a provision that would allow employees to reduce their salaries by up to $240 a month through the end of 2012 to pay for mass transit expenses, Senate Democratic leaders have been unable to muster sufficient support to bring up the broader bill for a vote by the full Senate.

In addition, another possible vehicle for the mass transit boost officially ended Feb. 22 when President Barack Obama signed a measure that extends a temporary reduction in the payroll tax rate through the end of 2012. Backers of a higher mass transit tax break had hoped that a transit tax subsidy provision would be attached to the payroll tax reduction bill.

The history of the higher mass transit tax break goes back to 2009, when lawmakers approved an economic stimulus measure that allowed employees to reduce their taxable salaries by up to $230 a month to pay for mass transit expenses. At that time, the maximum contribution was $120 per month.

Then, just prior to its expiration in 2010, lawmakers agreed to continue the higher mass transit tax break through the end of 2011 as part of a broader measure that temporarily reduced payroll taxes. That higher limit, though, expired at the end of last year.

The current monthly maximum contribution is $125.

Jerry Geisel writes for Business Insurance, a sister publication of Workforce Management. To comment, email editors@workforce.com.

Stay informed and connected. Get human resources news and HR features via Workforce Management's Twitter feed or RSS feeds for mobile devices and news readers.

Recent Articles by Jerry Geisel

Comments

Hr Jobs

Loading
View All Job Listings