Savings have been kicked up another notch for participants in the commuter benefits program, which can put hundreds of dollars back in your pocket each year in connection with the costs to ride the CTA, Metra, Pace and the South Shore Line to work, or to vanpool or pay for parking.
In addition, many transit riders who participated in the program in 2012 will get a refund check in the mail or money added to an upcoming paycheck to cover part of last year's commuting costs.
The major sweetener to the commuter benefits program was added at the beginning of 2013, as the Tribune reported at the time. That's when Congress passed legislation increasing the amount of work-related commuting expenses that public transit riders can shield from their taxable income, if they and their employers participate in the commuter benefits program.
The limit was raised to as much as $240 a month, a huge increase from the previous $125-a-month limit. The change made the transit benefit ceiling equal to the existing $240 a month parking benefit limit.
Now, the tax-savings benefit is going up a little more for bus and train commuters as well as drivers. As the result of a cost-of-living adjustment, the limit has been raised by $5 more, allowing participating employees to have up to $245 a month in pre-tax income deducted to pay for transit, parking and vanpooling expenses related to going to work and back.
In simple terms, participating in the commuter benefits program reduces the amount of an employee's income that the government can tax, and it provides additional tax benefits to employers. If you are not currently in the program, check with your company to see whether it is participating.
An individual whose monthly gross salary is $4,000 could save up to $1,200 a year by using the pretax benefit, according to the Regional Transportation Authority. The example is based on the employee using the maximum $245 benefit each month, which not all participants will do.
But every dollar saved is helpful, in light of the high cost of parking in the Chicago area, especially downtown; fare increases on Jan. 14 raising the cost of all CTA passes; and a hike that took effect Friday raising the price of Metra 10-ride tickets.
Under the fiscal cliff legislation approved by Congress, the pretax savings are retroactive to Jan. 1, 2012, officials said. But the Internal Revenue Service only recently provided information to employers about handling the excludable amount of transit benefits for 2012.
As a result, participating transit benefits employees at many companies have received W-2 wage and tax statements for last year that do not contain the amount of transit benefits that are excluded from being taxable, officials said.
Employees should check with their company's human resources department or third-party transit benefits provider before using the W-2 to file their 2012 income taxes, officials said. Many companies have notified their employees that a corrected W-2 , called a W-2c, is being mailed and that the employees should wait to get it before filing their income tax returns.
Some companies have also notified employees that they will receive a refund of overpaid 2012 taxes, either in the form of a refund check or the refund added to an upcoming paycheck.
Meanwhile, some transit benefits participants recently received a pleasant surprise — a temporary delay — regarding the CTA and Metra fare hikes that went into effect this year.
CTA 30-day passes now cost $100, up from $86, and a seven-day pass increased to $28 from $23. Three-day passes cost $20, up from $14, and one-day passes increased to $10 from $5.75.
Metra increased the price of 10-ride tickets by 11 percent, adding between $2.75 and $9.25 to the cost of each ticket, depending on distance traveled.
But transit benefit participants who ordered their CTA 30-day passes for February and Metra 10-ride tickets in late December and in January, before the price increases took effect, were charged the old fares, officials said. So were people who bought CTA passes at retail outlets before Jan. 14 and Metra 10-ride tickets at rail station ticket windows before Feb. 1 when the new fares went into effect.
"Thousands of commuters basically received a one-month reprieve from the higher fares,'' said Chris Wall, manager of the RTA transit benefit fare program.
Maybe it will make the rush-hour commute a little more bearable.
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