Mass Transit Benefit Will Drop In 2014

Mass Transit Benefit Will Drop In 2014

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The mass transit tax benefit used by thousands of federal employees will drop significantly in 2014, while the maximum parking benefit will increase by $5.

Beginning on Jan. 1, 2014, commuters will be able to use up to $130 in monthly pre-tax dollars to subsidize their mass transit costs — $115 less than the current maximum of $245 per month. The parking benefit will increase to $250 per month next year, up from the current $245 cap. Something similar happened in 2012, when the cap on the mass transit benefit was $125 per month, and the limit on the parking benefit was $240 per month.

The upcoming changes are a result of the 2012 American Taxpayer Relief Act, also known as the fiscal cliff deal. That law restored parity between the mass transit and parking benefits, but only for 2013. The mass transit increase for 2013 was temporary, which is why the cap will be smaller in 2014; the change for the monthly parking limit is a permanent provision in the law so the annual cost-of-living adjustment will boost the maximum benefit to $250 per month next year.

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