OGDEN — A measure in the recently passed “fiscal cliff” bill has increased a pretax benefit for transit riders, a move the Utah Transit Authority says will encourage more ridership.
Legislation in the American Taxpayer Relief Act, passed by Congress last week, raised the pretax benefit for transit riders by $115.
Individuals who get commuter benefits from their employers will now receive $240 a month, up from $125 last year.
The benefit allows employees to pay for transit with pretax earnings, similar to a health savings plan. The bill will make the benefit retroactive from Jan. 1, 2012.
The change now provides the same $240 benefit to transit riders that is given to drivers to cover their parking expenses.With the parity between public transit and parking benefits now equal, UTA says people who are on the fence about using transit to commute to and from work now have extra incentive.
“From our point of view, it’s great news,” UTA spokesman Gerry Carpenter said. “It encourages people to get out of their cars and use transit. In turn, that reduces congestion on our highways and improves our air quality.”
Carpenter said that when the parking benefit was higher than the transit benefit, a financial bias existed in the federal tax code against public transit use.
With the new legislation, a $189 premium monthly UTA pass, which covers FrontRunner and express buses, will now be fully covered.
The benefit will expire Dec. 31 of this year, but transit officials are calling on lawmakers to make it permanent.
“It is our hope that in the new Congress, legislation will pass to make the public transit commuter benefit parity permanent,” said American Public Transportation Association Chief Executive Officer Michael Melaniphy. “We hope the federal tax code will provide transit riders with the same tax benefits of those who drive to work.”
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