Senate panel approves bill to increase mass transit contribution tax break
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WASHINGTON—Employees would be able to make up to $240 a month in pretax contributions to pay for mass transit expenses through the end of 2013 as part of tax legislation approved last week by the Senate Finance Committee.
The higher limit would be retroactive to Jan. 1, 2012. Since Jan. 1, the maximum contribution limit has been $125 a month.
The provision is included in a broader bill, the Family and Business Tax Cut Certainty Act, approved Thursday by the Senate panel on a 19-5 vote.
The future of the mass transit provision, though, is not clear. This year, the Senate passed a highway funding bill with a provision under which employees would have been able to reduce their taxable salaries by up to $240 a month to pay for mass transit expenses. The higher limit also would have been retroactive to Jan. 1, 2012, but would have expired at the end of 2012.
However, a comparable provision was not included in a House-passed transportation bill. Congressional conferees, who ironed out differences in the two bills, and dropped without comment the Senate provision that would have boosted the mass transit contribution limit to $240 a month.
The congressional Joint Committee on Taxation estimated the mass transit contribution provision in the Senate highway bill, which also eased pension funding rules for employers and boosted Pension Benefit Guaranty Corp. premiums, would have cost the federal government $139 million in lost tax revenue.
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