Public Parking sign

Flickr user Chris Blakely (Creative Commons license, BY-NC-ND 2.0)

If you have commuting costs for parking, transit, or biking, you could be eligible for a federal tax subsidy. The IRS allows companies or employees to contribute up to $230 per commuter for monthly parking or transit commuting costs, a benefit that some 3 million people nationwide take advantage of.

For the last two years, the pre-tax limits have been the same for parking and transit. But it wasn’t always that way: for years, the IRS allowed much higher pre-tax payments for parking, giving transit riders short shrift. It wasn’t until 2009 that Congress brought transit commuting up to parity with parking.

Yet that change was temporary. As The New York Times points out, the parity provisions expire in 2012—so unless Congress acts soon, the policy will revert to subsidizing parking over transit. Drivers will be able to set aside up to $240 per month in pre-tax dollars for parking costs, while pre-tax setasides for transit costs will fall to $125 per month.


It’s hard to over-emphasize how stupid this sort of thing is: it’s regressive, it’s expensive, it boosts congestion and fuel consumption, and it may even undermine local transit service. It’s almost as if the car and oil companies were actively lobbying for a policy that helps their interests, but hurts America’s. But that couldn’t possibly be true, right? </snark>