{"id":503,"date":"2013-01-03T21:07:59","date_gmt":"2013-01-03T21:07:59","guid":{"rendered":"http:\/\/www.vantagenllc.com\/?p=503"},"modified":"2023-05-09T14:40:02","modified_gmt":"2023-05-09T14:40:02","slug":"new-tax-act-restores-higher-transit-expense-plan-limit","status":"publish","type":"post","link":"https:\/\/sitepreviews.org\/bt-vantagen\/503\/new-tax-act-restores-higher-transit-expense-plan-limit\/","title":{"rendered":"New tax act restores higher transit expense plan limit"},"content":{"rendered":"

The passage of the American Taxpayer Relief Act of 2012 (HR 8), which President Obama signed into law on January 2, yielded one particularly notable benefit to employers and employees. This Act restores the pre-tax benefit for employees commuting to work on public transit to $240 per month.<\/p>\n

Prior to the passage of this law, the pre-tax benefit was limited to $125 per month for public transit expenses and $240 for parking expenses. In 2009, the transit limit was increased as part of the American Recovery and Reinvestment Act (ARRA), however the increase expired on December 31, 2011.<\/p>\n

The increase of this limit will come as welcome news to employees, who now face increased payroll tax liabilities with the Social Security tax level returning to 6.2% from 4.2% as called for under the Relief Act. Employees can use their transit\/transportation benefit to reduce the impact of the expiration of this 2% payroll tax cut, which will impact paychecks immediately. According to the Tax Policy Center in Washington, the lapse of this payroll tax cut will pull more than $100 billion out of the economy in 2013.<\/p>\n

The monthly limit for parking expenses was not impacted by this Act. This limit remains set at $240 per month for 2013.<\/p>\n

Next Steps<\/strong>
\nThe adjusted transit limit introduces a set of communications, enrollment, administrative and payroll considerations that employers who offer these benefits will want to consider:<\/p>\n