Potential bad news for Federal Employees who take Public Transit- The IRS recently announced that the maximum permissible mass transit benefit in Calendar Year 2014 is $130 (down from $245 in 2013).
This directly affects the Federal Transportation Incentive Program (TIP) for next year. Here’s a quick sampling of monthly transit passes in different metro areas:
- San Diego North County Coaster – $165
- Chicago Transit Authority Monthly Pass – $100
- Seattle to Bremerton Ferry WSDOT Monthly Pass – $99.40
- Washington DC Metro 28-Day Pass – $230
… so TIP only falls short in DC and San Diego areas.
Private sector employers are rarely this generous with commuter benefits. In fact, some employees are happy to have a Section 132 Flexible Spending Account (FSA), which is creatively named after IRS section 132. The Section 132 FSA allows the employee to set aside up to $130 per month for mass transit and up to $250 per month for parking. Unlike TIP, there’s no stipend from your employer- you’re just purchasing mass transit tickets with before-tax dollars (which is a discount because FSA’s are Federal-, State-, and ‘Payroll’-Tax free).
If your city is not mentioned above, would love to hear the Public Transit pass costs in your town in the Comments Section.
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