Why the IRS Awards Driving Over Transit for 2012
By Ozzie Zehner
Starting on January 1, 2012, the IRS will reduce the allowable pre-tax contributions to transit riders while increasing benefits for drivers – an economic tax subsidy that will end up supporting car culture with twice the gusto of transit.
The IRS announced the following limits for pre-tax contributions and reimbursements on 2012 Commuter Benefits Accounts:
- Transit pre-tax contributions: Decreased from $230 to $125 per month
- Parking pre-tax contributions: Increased from $230 to $240 per month
History: The American Recovery and Reinvestment Act of 2009 (ARRA) increased the monthly pre-tax reimbursement limit for Commuter Benefit Transit accounts temporarily from $120 to $230. That limit expires on December 31, 2011.
Status: Congress has not acted to extend the current deadline. Unless they take action by January 1, 2012, the monthly pre-tax contribution and reimbursement limits for transit accounts will drop to $125, roughly half the limit for drivers.
Shameless Plug: Read about hidden car culture subsidies in my upcoming book: GreenIllusions.org