New law offers tax break for straphangers

January 4, 2016 Meaghan McGoldrick
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Some straphangers have a reason to smile this New Year.

Thanks to the city’s Commuter Benefits Law – which went into effect January 1 – a number of New York City commuters are now eligible for a long-fought-for tax break.

The law – signed by Mayor Bill de Blasio in October, 2014 – requires employers with 20 or more full-time, non-union employees to offer a commuter benefits program to its staff, allowing them to contribute pre-tax income to purchase monthly transit passes.

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Locally, riders are already rejoicing.

“The next time someone asks how government can make people’s lives better, I’ll show them this article. What’s better than starting off the new year with a tax break that will put hundreds of dollars back in your pocket?” said Ridgeite Justin Brannan, a regular subway rider. “Practical progress for hard-working commuters, improvements that will legitimately affect their day to day lives—that’s what it’ all about.”

“At a time when so many New Yorkers are struggling to stretch their hard-earned dollars, we are saving them hundreds every year and encouraging a greener way to travel,” said de Blasio who, on Monday, January 4, took to the subway terminal at Atlantic Avenue-Barclays Center to spread the good news. “Through powerful advocacy on the local and federal level to support our city’s straphangers, New York City employees and employers alike will feel the benefits of this law in their pocketbooks.”

Last month, the federal government permanently increased the benefit to allow use of up to $255 of pre-tax income per month for qualified transit expenses—up from the previous $130-cap.

As a result, officials said, more than 450,000 additional city workers will be able to save up to $800 a year in annual expenses.

“It is rare that by filling out a simple sheet of paper you can save over $800 a year,” said Senator Charles Schumer, who joined the mayor on Monday morning. “We worked very hard to double the mass transit deduction for commuters and now it is up to them to take advantage by asking employers how to sign up.”

Employers must comply by January 1 or four weeks after an employee begins full-time work, whichever is later.

The pre-tax money can be used for mass transit (MTA subway and bus, Long Island Rail Road, Metro-North, New Jersey Transit and Amtrak), eligible ferry, water taxi, vanpool and commuter bus services, as well as Access-A-Ride.

“I’m very thankful and know my fellow R and x27 riders will be as well,” said Brannan.

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