Steve Israel urges action on pretax commuter benefits
Rep. Steve Israel (D-Huntington) called Wednesday for urgent action to extend the current pretax commuter benefits before they expire at the end of the year.
Without the extension, he said, commuters could face an additional tax burden of as much as $1,140 a year, and employers also will face an increased tax liability, making it harder for them to hire new workers.
"New York commuters have endured enough already this year between delayed trains due to Hurricane Sandy and infrastructure issues on top of already long rides to work. Now some in Congress are going to ask them to possibly pay . . . more to commute," Israel said at a news conference at the Hicksville Long Island Rail Road station.
Israel said the mass transit pretax benefit allows employees who take buses, trains or van pools to work not be taxed on up to $245 of their pay per month. "But it will drop by nearly half to $125 a month on Dec. 31 if Congress does not take action," he said.
The bill, of which Israel is a co-sponsor, was introduced in the House Ways and Means Committee in June, and still has not been called to a vote.
Mark Epstein, chairman of the LIRR Commuter's Council, also was at the station and added that the tax benefit is an "important lifeline which helps hardworking commuters make ends meet," and it should be "made permanent."
Employees opt-in to the plan and determine their level of participation. Because employers don't have to pay payroll taxes on the benefit, they save as well.
"In fact, in 2010, employers saved over $300 million by offering the transit benefit. So if we don't act, employers will see a tax hike too, limiting their ability to grow," Israel said."The pre-tax commuter benefit is critically important for middle-class families in New York. Congress has stalled long enough; it's time to get the trains moving," Israel said.