December 21, 2015

On Friday, December 18, President Obama signed into law a 1.3 trillion-tax bill, Protecting Americans From Tax Hikes Act of 2015.   This law includes a monthly transit pre-tax amount increase for mass transit commuters on par with the current and future monthly pre-tax parking limit.  Effective 1/1/2016, participants in a transportation fringe benefit plan may elect $255 per month on a pre-tax basis for transit expenses.  This amount is the same as the monthly pre-tax parking limit.

As part of this update, the parity is retroactive and will apply to months after December 31, 2014, meaning the amount transit commuters are eligible for in 2015 is $250 per month on a pre-tax basis.  Per the IRS, this retroactive benefit would only be for employees who deferred above the $130 per month pre-tax.  The difference between $130 per month and the additional amount deducted by an employer may be recouped through an amended W2.

The parity is permanent for future years.