NEWARK, NJ -- NJ TRANSIT officials announced Wednesday that mass transit commuters can now set aside up to $255 per month in pre-tax earnings for public transit expenses, amounting to an estimated $1,000 annual savings. Actual savings vary depending upon individual costs.
On Dec. 21, 2015, elected officials met at the Walnut Street train station to announce the new benefits. U.S. Senators Bob Menendez and Cory Booker and Congressman Donald Payne, Jr. (N.J.-10) made an appearance to inform transit commuters of the new federal tax benefits to help pay the cost of rising bus and train fares.
The federal spending and tax package, approved by Congress and signed into law in December, included a provision co-authored by Menendez that increased the maximum monthly commuter tax benefit for transit riders, and brings it permanently in line with the benefit enjoyed by those who drive to work. This provision took effect on Jan. 1 for those who rely on public transportation to set aside up to $255 per month in pre-tax earnings to pay their commuting expenses, amounting to an estimated annual savings of over $1,000 for transit riders who recently were forced to absorb a 9 percent NJT fare hike.
In the release issued Wednesday, commuters were urged to check with their employer’s Human Relations department to see if they can take advantage of new federal tax benefits that could help pay the cost of their NJ TRANSIT services.
The federal spending and tax package, approved by Congress and signed into law in mid-December, increases the maximum monthly commuter tax benefit for transit riders. Previously, transit riders were able to put aside $130 a month.
“Pre-tax commuter benefits encourage the use of mass transit, which gets people out of their personal vehicles and onto trains, buses and light rail vehicles, reducing traffic congestion and pollution,’’ said NJ TRANSIT Interim Executive Director Dennis Martin. “Commuters who take advantage of these programs will see a boost in their wallets, while employers who offer this incentive to their employees benefit from reduced payroll costs.’’
Additionally, legislation was enacted to make the qualified parking tax-excludable amount at $255 a month, up from the $250 previously allowable.
Most large employers offer the transit benefit, but commuters are urged to check with their company Human Relations department to see if they participate. Since Jan. 1, 2016, New York employers with more than 20 employees were required to offer the transit benefit.
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