Transit Tax Benefit Equalized With Parking Benefit in Fiscal Cliff Deal

Happy New Year, transit riders! Thanks to some shrewd maneuvering on the part of some U.S. Senators, transit commuters will be able to claim as much in tax benefits as car commuters do in 2013.

Slipped into the fiscal cliff deal approved by the House of Representatives last night was a provision to boost the tax incentive to commute by transit. The commuting costs that straphangers could claim as tax-deductible had been reduced to a maximum of $125 per month last year, well below the $240 that car commuters could claim monthly to offset parking costs.

With transit and parking benefits again equal, there will be one less pernicious financial incentive to drive to work alone, as David Alpert at Greater Greater Washington noted:

In approving this extension, [Congress was] able to give many American workers a tax cut along with helping our cities function more effectively and ending one small example of the many ways government “picks winners and losers” among transportation modes.

The equalized tax incentive for transit was extended only though the end of the year, though, so electeds will again have to act to put transit on equal footing with driving.

Politico said the provision is expected to provide up to $190 million a year in incentives for transit riders. Good to see some smart policy came out of that messy, messy budget ordeal, which will continue to play out over the next few months, with plenty of implications for how Americans get around.

UPDATE: Transportation for America reports Senator Charles Schumer (D-NY) and Congressman Jim McGovern (D-MA) were the leading advocates of the transit tax benefit extension.