Attention, commuters. If you take mass transit, you could soon see your commuting tax break increase.
The Senate Finance Committee met April 3 to look at tax extenders, the more than 50 tax breaks that expired on Dec. 31, 2013. These laws get their name because they are temporary and must be renewed periodically by Congress.
The renewal usually happens, but often (as now) after the fact. Most of the expired tax provisions in the bill proposed by Senate Finance Committee Chairman Ron Wyden (D-Ore.) would be renewed for the 2014 and 2015 tax years.
Leveling the tax road for commuters
One of those provisions would equalize the tax breaks available to commuters who drive and those who use public transportation.
Bus, train and other mass transit fans fought to get the tax benefit for their preferred commuting method on par with that offered to motorized commuters. And until last year, they got the same monthly transit benefit.
That meant that if an employer offered the benefit, which essentially is like a flexible spending account where workers can save pretax dollars to cover commuting costs, drivers and mass transit users would be treated the same.
Last year, that was $245 a month for vehicle and mass transit commuters. It increased on Jan. 1 to $250 for auto commuters. But when the parity provision expired last year, the workplace benefit for public transportation riders fell to $130 a month.
The parity for public transportation provisions was in Wyden's extenders bill. It was approved by the full committee, so things are looking better for public transit commuters.
Biking options, too
Folks who pedal to work also get a tax break, but it is substantially smaller. Only $20 a month of a qualified transportation benefit counts toward bicycle commuter expenses.
Even more frustrating for some two-wheel fans is that memberships in bicycle sharing programs that are popping up across the country do not count as an eligible expense.
That could soon change.
Sen. Charles Schumer (D-N.Y.) introduced an amendment to the extenders bill that would include a tax exclusion for those who use bike share programs to commute.
"Bike share programs are an efficient, healthy and clean form of mass transportation, and they should be treated the same way under the tax code as we treat car and mass transit commuters," said Schumer in a statement announcing his proposal. "It makes no sense for cars, trains, buses and private bicycles to be covered by this program, but not bike shares."
Schumer's amendment was added. Now commuters just have to wait for the House to take up the measure.
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Veteran contributing editor Kay Bell is the author of the book "The Truth About Paying Fewer Taxes" and co-author of the e-book "Future Millionaires' Guidebook."