Three things are great about the program (in my case the administration is handled by WageWorks);
- My company will pay half of the cost of my pass or Clipper Card purchases.
- My contribution is deducted from my income over the year reducing my taxable income.
- It's all handled through my paycheck. No need to make a separate payment.
Although I only purchase $70 in transit passes each month through my employer, there is a limit on the amount the IRS will allow an individual to reduce their income. Car commuters are also allowed to deduct car parking expenses from income but I was completely floored when I found this note included with my monthly statement from WageWorks.
Important Note: The temporary $230 monthly pre-tax transit limit set by Congress in 2009 will expire at the end of 2011. Beginning with the January 2012 benefit month, the pre-tax transit limit will decrease to $125 a month and any election amount over $125 will be deducted from your pay on an after-tax basis. Beginning with the January 2012 benefit month, the monthly pre-tax limit for parking will increase from $230 to $240.
So beginning next month solo (or not) vehicle drivers will have a greater tax advantage to use our streets, bridges, and freeways than public transit users
Contact your congress member today to tell them how wasteful this policy is, while also increasing traffic congestion and air pollution. Better yet go to this link on the Transportation for America website