Tuesday, February 7, 2012

New in 2012 – Changes to Commuter Pretax Benefits

1040 - US Tax Return
image by 401K used under Creative Commons license

As part of the American Recovery and Reinvestment Act (ARRA), the amount of money that an individual could spend tax-free for qualifying transportation costs, such as taking mass transit or riding in a registered vanpool, was increased in 2009 temporarily from $125 per month to $230 per month. This short-term boost was scheduled to last through 2011. On Jan. 1, 2012, the amount of money that someone can spend tax-free on qualifying transportation costs returned to its original level of $125.

But these benefits are still an important way to reduce air pollution and to save some money. Mass transit and vanpooling help keep cars off roads in the New York metro area, thus improving the region’s air quality. Paying for these costs without being taxed means you owe less money come tax time! Talk to your employers to see if they offer pretax commuter benefits. If they do not, you can refer them to 511NY if they are interested in setting them up.

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