This week’s last-minute deal avoiding a jump over the fiscal cliff will bring some relief to a perhaps unexpected group of taxpayers: Commuters.
Yeah, most of us are happy that we’re not hurtling over the fiscal cliff. But this might come as unexpectedly good news for some. As Steve Higashide of the Tri-State Transportation Campaign puts it:
“This change will bring significant pocketbook relief for hundreds of thousands of transit riders in the region.”
He’s talking about legislation that significantly increases the tax cuts employees can get for riding public transit to work. Basically, more of the money they spend on commuting can be deducted from their gross income, called a pre-tax benefit.
“If you are a Metro-North rider who makes $50000 a year, this is effectively a $400 tax cut," Higashide says.
Before the law passed as part of the fiscal cliff deal, transit riders could benefit from spending up to $125 a month on commuting. Now that number jumps to $240 a month. Higashide says that for anyone who’s commuting from Connecticut to Grand Central Station, “you’re spending more than that.”
15,000 companies in New York City alone offer the benefit, and 500,000 people who work in New York take advantage of it. That’s a victory for hundreds of thousands in the tri-state region and possibly many more in Connecticut, but it only lasts until 2013. The next step will be making the tax change permanent.