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Federal commuter tax benefit cut by nearly half

December 29, 2011 3:08:56 PM PST
A not-so-happy new year for millions of folks in the tri-state who take mass transit.

The federal commuter tax benefit, which lets you deduct mass transit expenses, pre-tax, has been cut by nearly half.

That means a sort of hidden tax hike for millions of people.

Brianna and a buddy are taking the train into the city. She called her trip by car to Long Island the other day, a nightmare.

"We got caught in traffic. After 2 hours, we were still in Jersey City," said Brianna Graciano, a commuter.

It's what hundreds of thousands of bus and rail commuters miss, thank goodness, by not driving.

But many are about to lose part of another commuter benefit that saved them hundreds of dollars a year.

A federal stimulus plan that nearly doubled the amount of money commuters could claim tax free, as a part of the expense of traveling to work, ends at the end of the year.

For example, a monthly pass from New Brunswick to New York Penn Station is $361.

With the stimulus, only $131 dollars of the expense is taxed. Without the benefit, $241 is taxable income.

"You're talking about 13, 14 hundred dollars a year, doldrums that it is," said Albert Papp, NJ Association of Railroad Passengers.

New Jersey Senators Bob Menendez and Frank Lautenberg sent a letter to the Senate Finance Committee, asking it to maintain the higher benefit for commuters, who's mass transit travels, they say, have more far-reaching benefits for everyone.

"It saves on the fuel, it's hard to park over there," a commuter said.

Commuters sign up for the benefit through their employers, who also get a 10% tax break.

Rail activists say it can save commuters up to 1,500 a year.

So far, the finance committee has not acted.

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