We’ve been following the effort to keep the transit pass subsidy limit in the federal tax code equal to the parking subsidy at $230 a month. Fortunately, the measure seems to have made it into the federal tax cut compromise. The extension only takes us through 2011, but it’s a start.
PubliCola reports cloture in the Senate, and helpfully links to a summary that confirms the benefit is still in there. Without passage, the monthly cap would have slipped to $120, big enough for most Puget Sound commuters but far too low for some other areas.
In a related tidbit from the Forbes story:
A new law, also enacted in 2009, that lets your employer reimburse you $20 a month for bicycle commuting as a nontaxable fringe benefit, is permanent.
Here’s some more information on this benefit, which those of you who are employers might wish to explore. One key fact is that it can’t be taken in the same month as a transit benefit.
Good news for Sounder riders, CT-express riders, and long-distance vanpoolers!
I’d actually be fine if they killed the exemption for ALL employees. Given the far higher cost of parking the benefit would actually tip in favor of transit.
That said, the paperwork involved in calculating parking values might be cumbersome. So this seems like an acceptable compromise.
Really, tax simplification! There are too many of these silly subsidies/loop holes. Sounds like Obama is taking a play from the the Gipper’s playbook and launching a program of tax re-simplification. This would be a good place to start. Sorry, Uncle Sam doesn’t feed the meter for you or buy your bus ticket.
I don’t have a problem with tax incentives that go toward productive uses, but you have to wonder how this one got into law:
Extension of seven year straight line cost recovery period for motorsports entertainment complexes. The bill extends for two years (through 2011) the special seven year cost recovery period for property used for land improvement and support facilities at motorsports entertainment complexes.
Trying to calculate the imputed “income” of the taxable fringe benefit provided by free parking out in the ‘burbs where there is no paid parking to compare to would not be simplification. That’s the real reason the loophole is there, and why the limit is so high. I’m sure the IRS could come up with guidelines but it would be either pretty hand-wavey or unbearable complicated.