Public transit tax benefit leaves Bay Area riders in the lurch 

click to enlarge Changes: Caltrain passes — which cost $338 monthly for commuters traveling from San Jose — could be harder on the wallet after a transit tax break expires. - SF EXAMINER FILE PHOTO
  • SF Examiner file photo
  • Changes: Caltrain passes — which cost $338 monthly for commuters traveling from San Jose — could be harder on the wallet after a transit tax break expires.

Bay Area commuters with hefty transit costs will get a lot less help from the federal government in dealing with those fees next year, while motorists will receive extra financial incentive to drive to work.

As part of a stimulus-era program passed in 2009, transit commuters have been able to deduct up to $230 a month from the taxable income they report to the IRS. With that program set to expire, the maximum deduction for transit commuters has been slashed to $125 a month, an 84 percent reduction.

But while the amount that transit commuters can write off has shrunk, the monthly exemption for parking will go up from $230 to $240.

Christine Maley-Grubl, executive director of the Peninsula Congestion Relief Alliance, a transit advocacy organization, said that scenario provides the wrong incentive for Bay Area commuters.

“We want people out of their cars so there is less congestion and less impact on our air quality,” Maley-Grubl said. “That’s not going to happen by giving people additional funds for parking.”

Maley-Grubl said some transit commuters could lose up to $500 a year under the new guidelines.

Commuting in the Bay Area can be costly, particularly for passengers traveling from the South Bay or North Bay to The City. A monthly Caltrain pass for commuters traveling from San Jose costs $338. Travel on Golden Gate Transit from Santa Rosa to San Francisco amounts to more than $400.

In fact, 30 percent of Bay Area commuters spend more than $125 a month on transit, according to Dan Corbett, vice president of transportation development at WageWorks.

Jack Doyle, a San Francisco resident who commutes down to the Peninsula every day on Caltrain, said he spends $179 a month on his transit pass. With the reduction of the commuter benefit program, an additional $648 of his annual pay is now taxable.

“I’m real disappointed this program is ending,” Doyle said. “Those costs may not seem like a lot at first, but they definitely add up.”

Up until the American Recovery and Reinvestment Act in March 2009, commuters could only write off $120 a month for their transportation costs. The increase to $230 a month was originally supposed to expire at the end of 2010, but Congress agreed to extend the plan for another year under the Tax Relief and Job Creation Act.

Drew Hammill, spokesman for Rep. Nancy Pelosi, D-San Francisco, said the congresswoman pushed for the plan to be extended for another year, but was rebuffed by partisan disagreements.

wreisman@sfexaminer.com

Commuter cash

On Jan. 1, changes will be coming to the amount of transit costs that commuters can deduct from taxable income on their paychecks:

Current exemption  
Exemption on Jan. 1
Percent change
Parking $230 $240 +4
Transit $240 $125 -84

Source: IRS

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